For the first time ever Vietnam has imported more cars from Thailand than China in the first quarter of this year, thanks to preferential tax policies among ASEAN countries, the latest customs data show.
Thailand has beaten China to become Vietnam’s largest source of imported cars, with 7,800 vehicles shipped in the Jan-Mar period, an enormous 64.5 percent increase on the same period last year, according to the General Department of Vietnam Customs.By comparison, imports from China reached 2,260 units, a sharp decline of 58 percent from Q1/2015. Shipment of South Korean cars also dropped by 41 percent from the first quarter of last year to 3,560 units, according to the customs department.According to the Vietnamese Ministry of Finance, tax incentives on car imports among ASEAN countries has played a crucial role in the increase of car imports from Thailand. Prices of Thai-imported vehicles have also become much more reasonable than their Chinese and South Korean rivals.ASEAN is the ten-country bloc that includes such Southeast Asian countries Brunei, Cambodia, Laos, Indonesia, Myanmar, Malaysia, the Philippines, Singapore, Thailand, and Vietnam.Starting this year, car import taxes among ASEAN countries have been cut from 50 to 40 percent, and will drop to 30 percent next year, with most duties set to be zeroed by 2018.These tax cuts have enabled more cars from Thailand and Indonesia to enter Vietnam, according to the finance ministry. In the first quarter of this year, Vietnam imported more than 19,700 cars, which was actually down 16.8 percent from a year earlier.From the beginning of July, Vietnam is set to apply adjusted excise duties for several types of car imports, which is expected to make those with bigger engine capacities much more expensive.The excise duty for imported cars with a 1.5 liter engine and below will be cut to 40 percent from the current 45 percent, Bui Kim Kha, deputy chairman of the Vietnam Automobile Manufacturers’ Association (VAMA) told Tuoi Tre (Youth) newspaper on Monday.The tax cuts have resulted in only modest price reductions of between VND10 million and VND20 million (US$446-$892) per vehicle, dependant on model, Kha said.Conversely, imports with bigger engine capacities will be subject to higher import duties from July 1.Cars with an engine capacity of 2.5-3 and 3-4 liters will be subject to duties of 55 percent and 90 percent, respectively, which is up from the current 50 percent and 60 percent.
The duties will be as high as 130 percent for cars with 5-6 liters engine, and 150 percent for those with an engine capacity larger than 6 liters.
The new import taxes will increase the price of an imported 3.3 liter Kia Sedona by VND200 million ($8,929), and a 3.5 liter Lexus RX 350 could cost more than VND3.9 billion ($174,107), up from the current VND3.3 billion ($147,321), according to the VAMA.
Source: Tuoi Tre News
Photo: Tuoi Tre News