New vehicle sales in Vietnam fell 60% to 4,274 units in January, from 10,556 units a year earlier, according to the Vietnam Automotive Manufacturers Association.
The decline follows a 20% hike in registration taxes in Hanoi and 15% in Ho Chi Minh City at the beginning of 2012. Vehicle buyers brought purchases forward to the end of 2011 to avoid the higher costs.
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Vietnam has among the highest automotive taxes in the world, as well as among the highest retail interest rates – at over 20%. Even before this latest tax increase, Vietnam was already one of the most expensive countries in the world for cars.
Sales of all types of vehicles were sharply lower in January, with passenger car sales falling by 56% to 1,782 units; MPV and SUV sales down by 67% at 929 units; and commercial vehicles by 59% at 1,492 units.
Toyota regained market leadership, with sales falling by 50% year-on-year to 1,542 units; followed by Truong Hai – which assembles Kia cars and various commercial vehicles – with a 61% decline to 876 units. Third-placed GM-Daewoo reported a 47% drop in sales to 560 units.
