New vehicle sales in Vietnam more than doubled year-on-year in May, according to data released by the Vietnam Automobile Manufacturers Association, making it 22 months of consecutive year-on-year growth.
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Sales reached 11,494 units during the month – 106% higher than the 5,573 units sold in May 2007.
Vehicle sales have increased sharply this year in anticipation of higher automotive taxation. Import duties on car parts doubled from 5% to 10% on 20 May, which followed a hike in duties on imported built-up vehicles, with the ceiling raised from 70% to 83%. Vehicle registration fees are also expected to be raised in the short-term.
The government wants to limit the country’s burgeoning automotive trade deficit, which exceeded US$1.3bn in the first five months of the year, as well as limiting growth in road congestion and fuel consumption.
Cumulatively, vehicle sales in the first five months of 2008 reached 58,860 units – 162% higher than the same period of last year. Imports of built-up vehicles reached 35,400 units, according to data released by the country’s customs department – a six-fold year-on-year increase. Imports of commercial vehicles have been particularly strong as a result of the country’s recent strong economic growth.
During the first five months of 2008 Viet Nam Motors Industry Corporation (Vinamotor) remained the market leader with 13,162 sales of Hyundai-based commercial vehicles, followed by Toyota with 10,228 vehicle sales, Truong Hai with 9,616 Kia-based commercial vehicle sales and GM-Daewoo with 5,874 units.
The industry expects the market to weaken in the coming months following the implementation of automotive tax increases and as economic growth continues to cool.
The government now expects full-year GDP growth to be in the region of 7% – still high by regional and global standards. Inflation recently has been reported to be as high as 25%, fuelled by high commodity prices which is having an effect on consumer spending power.
Tony Pugliese
