The Vietnamese government has announced a temporary 50% cut in the registration tax for new locally assembled vehicles to revive the weak domestic vehicle market.
Vehicle sales began to stablise in the second quarter of 2024, after a steep decline in the previous year, as economic growth in the country continued to pick up momentum, driven mainly by strong export and investment growth.
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The Vietnamese consumer had been slow to recover from the Covid pandemic, however.
Vehicle sales in the first seven months of 2024 were down by 3% at 140,422 units, according to wholesale data released by the Vietnam Automotive Manufacturers Association (VAMA), driven mainly by a recovery in the commercial vehicle segment.
The registration tax discount would be effective for three months from 1 September until the 30 November. The normal vehicle registration tax varies across the country, starting at 10% in Ho Chi Minh City and rising to 12% in Hanoi.
The tax discount was also designed to help domestic producers compete with the rising number of imports particularly from China.
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By GlobalDataAccording to local reports, the discount would reduce state revenue by an estimated VND867bn (US$35m) in the three months.
