Despite the recent 10 percent hike in import tariffs on both new and secondhand automobiles, dealers continue to import cars in the thousands.
|An auto salon packed with new and used cars in District 5, HCMC (Photo: SGGP)|
Forecasts say demand will continue to rise despite the increase in prices.
Instead of five or seven cars they usually display, auto salons in HCM City are packed with both new and used vehicles.
SP Auto Salon on Nguyen Thi Minh Khai Street, District 3, has dozens shining Toyota Camry and KIA Morning cars.
Bui Huu Cang, the company’s sales manager, says the cars on display were imported before the tax increase took effect on April 2 and still cost the old prices -- of US$16,000--40,000, depending on the brand and model.
Tran Duy Phu, director of the An Phu Gia Import-Export Limited, says a huge number of cars imported by automobile companies are also kept at bonded warehouses at ports.
Nguyen Nam, head of sales of Auto Salon on Nam Ky Khoi Nghia Street, says there has been a rise in the number of customers coming to make inquiries and see cars.
Since mid-March, his salon has sold six cars, including a Toyota Camry 3.5 for $68,000, a Honda Pilot for $78,000, and some smaller cars like KIA Morning and Huyndai Getz for $20,000, he says.
Affluent people continue to buy luxury cars while customers looking for economy models have a real need for them; therefore, the Ministry of Finance’s decision to increase import duties from 60 percent to 70 percent has not affected his company’s business much, he explains.
Nam predicts demand for mid–size cars to rise sharply.
Analysts forecast higher imports of automobiles, but warn of a possible downturn triggered by the government’s recent instruction to the Ministry of Finance to recheck and slap higher special consumption taxes on some luxury goods including automobiles and auto parts.
Then, Nam says auto salons will have little choice but to limit their sales and wait for the government to announce a new special consumption tax regime.