Several auto firms have adjusted down prices of completely-built-up (CBU) autos imported from regional markets following an import tax reduction this year in line with a roadmap of the ASEAN Trade in Goods Agreement (ATIGA).
Toyota Vietnam has lowered the selling price of Yaris G cars by VND47 million to VND642 million per unit and Yaris E by VND44 million to VND592 million. Both models are imported from Thailand.
Honda Vietnam now retails an Accord auto made in Thailand for VND1.39 billion, down VND80 million from last year.
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Car importers credited the lower prices of cars imported from regional markets to the duty on CBU autos being slashed to 30% this year from 40% in 2016 under the ATIGA. They said cars assembled in Thailand and Indonesia make a majority of autos imported into Vietnam from the ASEAN region.
An auto trading firm calculated a reduction of 10 percentage points will lead to a decline of 6%-7% in the retail price of an imported car if new taxes and fees are not slapped on it.
Other auto firms have not announced their new selling prices but market watchers said they would have to follow suit soon if they wanted to retain their market shares and keep their sales stable.
Experts noted not many types of imported cars would be sold at lower prices this year since auto joint ventures would not bring in autos that can compete with the models they manufacture in this market. Favored car models of Toyota, Ford, Honda and Isuzu are assembled in Vietnam as components are subject to import tariffs of 15-25%, lower than those on CBU autos.
Currently, most CBU autos imported from ASEAN markets are pick-up products including Toyota Hilux, Ford Ranger, Nissan Navara, Chevrolet Colorado, Isuzu D-Max, and Mitsubishi Triton. These imports are entitled to a duty of 5% so a further tax cut will not result in a significant fall in their selling prices on the domestic market.
Experts said if the duty on CBU auto imports from regional countries is slashed from 30% to 0% in January 1 next year, Yaris cars will retail for less than VND500 million a unit, down VND130-140 billion compared to the current price.
From 2018, the special consumption tax for autos with engine capacity of 1.5 liters or smaller will slide to 35% from the current 40%, leading prices of such imported CBU autos to be lower than those of locally-assembled autos. Therefore, it is difficult for domestic cars to compete with imported ones if their prices are not adjusted down.
The tariffs on autos imported from other markets outside ASEAN have fallen as Vietnam committed when joining the World Trade Organization (WTO). Accordingly, the duties on 4-wheel-drive cars, sport utility vehicles (SUV) and autos with engines of more than 3.0 liters have been cut to 58% from 70%, to 47% from 51%, and to 58% from 61% since January 1 this year.
This is the reason why Toyota Vietnam has revised down the price of Lexus LX570 imported from Japan by VND210 million to VND7.81 billion, Lexus LS460L and Lexus GX460 by VND140 million to VND7.54 billion and VND5.06 billion respectively.
Currently, Lexus RX350 AWD, Lexus GS350 and Lexus ES350 retail for VND3.81 billion, VND4.39 billion and VND3.21 billion, representing respective decreases of VND100 million, VND80 million and VND50 million.
Toyota Vietnam sells Land Prado TXL and Toyota Land Cruiser VX imported from Japan at prices that are VND164 million and VND70 million lower than last year.
However, other auto firms have not reduced prices despite lower import duties in accordance with the country’s commitments to the WTO.
