(PLO)- The 50% reduction in registration fee is a help not only to stimulate consumer demand in a gloomy context but also to help domestic automobile enterprises reduce cash flow pressure as well as have more time time and resources to balance production maintenance costs.
From July 1 to the end of 2023, according to Decree 41/2023, the registration fee for domestically manufactured and assembled cars will be reduced by 50%. This is the second time the Government has applied this policy with the expectation of boosting purchasing power in the context of production and business in the automotive sector facing many difficulties.
The results of the first application (in 2022) have helped the auto market break out after a difficult period because of the COVID-19 epidemic, sales skyrocketed. With that positive factor, domestic automobile manufacturing and assembling enterprises recovered and even increased budget revenue.
The 50% reduction in registration fees is a help not only to stimulate consumer demand in a gloomy context but also to help domestic auto businesses reduce cash flow pressure as well as gain more time and resources. balance production maintenance costs. Another support for the domestic automobile industry when in June 2023, the Government also issued Decree 36/2023 extending the deadline for paying excise tax for automobile enterprises manufactured and assembled in Vietnam. water.
However, it must also be recognized that the context of the economy in the first half of 2023 is different from that of 2022 when facing many difficulties in terms of global inflation, domestic production and business in general face many obstacles. In particular, for consumers, income is reduced, lending interest rates of credit institutions are still very high, so buying a car at this time will have to be considered a lot.
Therefore, in addition to two timely supports from the Government to help car prices reach people cheaper from a few tens of millions to hundreds of millions of dong compared to before, a third help is still needed from the auto dealers themselves. to stimulate demand and attract more consumers. Specifically, car manufacturers and distribution agents need to continue to have many promotion policies, self-adjust car discounts, discounts, cut profits, increase more gifts, offer insurance packages, service maintenance… In particular, it is necessary to combine with banks with a loan package with reasonable interest rates, which is affordable for people.
Don’t be like the previous times, when the Government implements a 50% reduction in registration fees, it is also the time when car dealers … cut all promotions and incentives for customers.
In the long run, reducing the registration fee is only a timely solution to support the domestically manufactured and assembled automobile industry. In order to stabilize production and output, to compete with the wave of imported cars with good prices increasing each year from Indonesia and Thailand, the domestic auto industry needs long-term solutions to reduce production costs. reduce the cost of domestically produced and assembled cars. And to do that, experts say that it is necessary to have policies to increase the localization rate, “forcing” car manufacturers to invest, develop supporting industries, and produce automobile components and spare parts. more cars in Vietnam.
In addition, in order to help domestic car prices be more competitive with imported cars, the special consumption tax on domestically manufactured and assembled cars with CO2 emissions is required.2 If the tax is low, the tax rate is low and conversely, the high tax for cars causes more environmental pollution.