Vietnam's car import value continues skyrocketing
This year's trade deficit for the car industry is expected to reach a record of more than USD3.4 billion and the figure would continue to increase in the following years due to strong domestic demand.
This year's trade deficit for the car industry is expected to reach a record of more than USD3.4 billion
According to the Ministry of Industry and Trade, Vietnam imported 75,438 cars worth a total USD1.68 billion in the first half of this year, up 513% and 413.4% respectively.
ASEAN-imported cars account for up to 88.8% of the country’s imported car number since January 1, 2018 when zero import tariffs applied on ASEAN-imported cars took effect.
Meanwhile, the import of cars from South Korea, India and Japan has sharply fallen as less Mazda and Hyundai cars were imported in Vietnam since Thanh Cong and Truong Hai auto firms have partnered to boost locally-assembled cars of these brands since late 2017.
The Ministry of Industry and Trade reported that cars imported from China have critically dropped due to the fall in truck demand in the local market.
According to the ministry, more trucks are locally produced, which is the main reason for the decline in Chinese-imported cars. Higher registration fees imposed on trucks has partially contributed to the fall.
The ministry has forecasted that car import value would be USD3.4 billion this year and the figure would be higher in the coming years. This not only seriously affects domestic automobile production but also affects the trade balance.
To improve the situation, the ministry has proposed solutions to support domestic car manufacturers, including not applying special consumption tax for vehicles which are locally-produced, as part of efforts to reduce the price of cars.
The ministry also expected the government to adjust import taxes on the principle that the import tax rate on components, spare parts and raw materials must be lower than the import tax rate on completely built-up cars, or at floor level according to international commitments in each period.
The Ministry of Industry and Trade will suggest building a credit package of VND100 trillion (USD4.4 billion USD) for developing the support industry for industrial sectors, especially automobile production.