On the Heels of ASEAN Tariff Reduction, Vietnam Car Imports Double

A month into 2017, Vietnam has already imported two times more new cars than it did in the same period last year.

According to data from the Department of Vietnam Customs, reports VnExpress, during the first half of January, the country brought in more than 4,900 cars, valued at US$116 million in total. Both of these figures are twice that of the same period in 2016.

Statistics also show that of the nearly 5,000 imported cars, 3,700 are nine-seaters or smaller. In the first two weeks of January 2016, only 1,200 such cars were imported.

Economic experts believe that the sudden surge in automobile imports is a consequence of new tax policies that went into effect on January 1, 2017.

The government put these in place in accordance with the ASEAN Trade in Goods Agreement 2016-2018, which states that automobiles imported from ASEAN member countries will enjoy a 30% reduction in tariffs (an additional 10% decrease compared to 2016). The increase in the number of imported cars from Thailand also falls in line with the new tax reduction.

According to Vu Quang Tam, vice president of Honda Vietnam, in the next few years, the company will only focus on assembling a few products internally.

Tam shared with the news source that in the near future Thai automobiles might become even cheaper than those assembled in Vietnam, as imported car parts currently carry around a 10-30% tax rate, while the government is aiming to completely eliminate car tariffs on ASEAN-imported vehicles in 2018.

Thus, in order to take advantage of these changes, Honda is likely to start selling Thai-produced vehicles, as this will be more cost-efficient than selling those assembled in Vietnam.

[Photo via Zing]

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