Car deals to cushion tax impact

Many prospective automobile buyers have been hesitant to make purchases

Mercedes Benz Vietnam (MBV) has announced a lucky draw for its customers, with bank accounts containing between VND100 million ($6,290) and VND300 million ($18,867) set to go to three lucky buyers of C-Class vehicles and minibuses. In addition, the company will partly support registration fees, to the tune of $1,150 for C180K and $700 for MB140D buyers.
MBV public relations manager Nguyen Hop Ky said this was a promotion campaign that would end in June, not a price reduction.
“We sympathise with those customers who saw car prices increase significantly as a result of the tax imposition,” Ky said.
He said that actual MBV car prices this year were lower than last year and the price increases since the beginning of the year were due to the taxes, not to the company’s intention to hike prices.
“Our surveys showed that MBV has the lowest prices compared to other Mercedes Benz companies in the region.”
Customers have been discouraged by rising car prices since the beginning of the year when the special consumption tax on cars with less than five seats was increased from 5 to 24 per cent. The tax on automobile part imports rose by 5 per cent, last September.
The increases left car makers with no choice but to increase prices by up to 25 per cent, depressing sales. Only 5,488 units were sold during the first three months, a year-on-year decline of 25 per cent, according to the Vietnam Automobile Makers Association (VAMA).
MBV is not the only company trying to reassure customers. Vidamco is giving prospective buyers interested in its new Magnus L6 one week of free test driving, while Ford Vietnam is supporting registration fees for buyers this month. Vietnam Motors Corporation (VMC) has announced a spring promotion, reducing prices on the Kia Spectra

to $19,900 from $21,200 and the Kia Pride SL by $1,000 to $12,900.
It will support a registration fee tantamount to 5 per cent of the car’s value by the end of this month for those purchasing Mazda6 cars, a brand that sold only 18 units during the first three months.
VMC said the strategy was aimed at “sharing the financial burden customers might meet when purchasing cars”.
VAMA figures show that VMC was hit hard by the tax hike, selling only 88 cars during the first three months compared with 689 units sold in the same period last year. It did not sell any BMWs during the period and its market share shrank to 1.6 per cent from 9.42 per cent.
MBV sold only 195 cars compared to 732 units in the same three months last year. Vidamco sold 722 cars compared to 1,114 last year, according to VAMA statistics released last week.
Toyota, Visuco and Mekong were the only firms among the 11 foreign car assemblers that increased sales.
Toyota was a market leader with 2,143 cars sold in the first three months, a year-on-year increase of 12.2 per cent. Its market share grew to 39 per cent from 25.7 per cent last year. Its best sellers were the Zace model with 791 units and Camry 2.4 with 339 units.
Visuco has jumped to third position with 12.6 per cent of market share, selling 693 vehicles since the beginning of the year. Its sales increase was owing to its assembling of vans and trucks, which were unaffected by the tax hike. It sold a total 629 of these vehicles.