Auto registration fee cuts seen not steep enough

According to this draft resolution, the proposed personal car ownership restriction fee will not be put into practice. The registration fee for cars under 10 seats will be cut to 10 per cent but local authorities are allowed to revise up this fee by no more than 50 per cent. For secondhand cars, the registration fee will also decrease sharply to 2 per cent nationwide.

The fact that personal car ownership restriction fee collection was proposed while car registration fees were hiked from 10 per cent to 15 per cent by HCMC and from 12 per cent to 20 per cent by Hanoi early this year has dealt a blow to the auto market.

The Vietnam Automobile Manufacturers Association (VAMA) said that these fees are a big obstacle to car ownership, causing a sharp decline in auto sales this year. Besides, the auto industry is facing challenges due to the economic crisis, credit limits and consumers’ tightening their expenses.

Some enterprises said that solutions in the draft solutions will not bring about impacts to all localities in the country. Although registration fee for cars under 10 seats will be cut to 10 per cent, local authorities still have the right to revise it up to the maximum rate of 15 per cent like now.

If the draft resolution is adopted, Hanoi, where car registration fee is up to 20 per cent, is the only city to cut this fee to 15 per cent. Meanwhile, other localities like HCMC and Dalat are now applying registration fees at 15 per cent, the enterprises explained.

VAMA suggested applying a single car registration fee at 10 per cent throughout the nation to stimulate consumption.

The enterprises were also worried that whether the disapproval of personal car ownership restriction fee collection would take effect only in 2013 and this fee will be applied in the following years.

This fee proposed by the Ministry of Transport has raised public concerns and sharply driven down the auto market. If disapproval of this fee is just a solution for next year only, consumers will still feel hesitant.

Local firms predicted low demand for cars next year as the economic situation has yet to improve while many consumers will continue cutting expenditures.