Customers inspect cars at a showroom in HCMC. The auto market has declined sharply this year - Photo: Quoc Hung

While the Government’s draft resolution implies automobile registration fee reductions would start next year to support consumers and enterprises, there are concerns the fee will remain high and cause little positive impact on the gloomy auto market.

According to this draft resolution, the proposed personal car ownership restriction fee will not be put into practice. The registration fee for cars under 10 seats will be cut to 10% but local authorities are allowed to revise up this fee by no more than 50%. For secondhand cars, the registration fee will also decrease sharply to 2% nationwide.

The fact that personal car ownership restriction fee collection was proposed while car registration fees were hiked from 10% to 15% by HCMC and from 12% to 20% by Hanoi early this year has dealt a blow to the auto market.

The Vietnam Automobile Manufacturers Association (VAMA) said that these fees are a big obstacle to car ownership, causing a sharp decline in auto sales this year. Besides, the auto industry is facing challenges due to the economic crisis, credit limits and consumers’ tightening their expenses.

Some enterprises said that solutions in the draft solutions will not bring about impacts to all localities in the country. Although registration fee for cars under 10 seats will be cut to 10%, local authorities still have the right to revise it up to the maximum rate of 15% like now.

If the draft resolution is adopted, Hanoi, where car registration fee is up to 20%, is the only city to cut this fee to 15%. Meanwhile, other localities like HCMC and Dalat are now applying registration fees at 15%, the enterprises explained.

VAMA suggested applying a single car registration fee at 10% throughout the nation to stimulate consumption.

The enterprises were also worried that whether the disapproval of personal car ownership restriction fee collection would take effect only in 2013 and this fee will be applied in the following years.

This fee proposed by the Ministry of Transport has raised public concerns and sharply driven down the auto market. If disapproval of this fee is just a solution for next year only, consumers will still feel hesitant.

Local firms predicted low demand for cars next year as the economic situation has yet to improve while many consumers will continue cutting expenditures.

The Saigon Times Daily