Will reducing registration fees make the car market more vibrant?

The auto market is starting to show signs of improvement after a long period of gloom.

From July 1, the policy of reducing 50% of registration fees for domestically produced and assembled cars will take effect. This is considered a boost to help the car market recover after a long period of stagnation.

Signs of improvement

We went to the Mazda Hai Duong dealership on Nguyen Luong Bang Street (Hai Duong City) on a weekend morning. Besides the large number of customers bringing their cars for maintenance, there were nearly a dozen people looking to buy new cars.

According to Mr. Pham Minh Tuan, Sales Director of Hai Duong Auto Joint Stock Company (Hai Duong City), right after the policy of reducing 50% of registration fees for domestically produced and assembled cars took effect (according to Decree 41 of the Government), the number of customers registering to buy cars increased. Hai Duong Auto Joint Stock Company specializes in distributing cars of Mazda and Kia brands. In July, the company sold about 100 cars, while the average in previous months fluctuated from 80-90 cars. According to Mr. Tuan, with the current car prices, reducing registration fees will help car buyers save from 30-40 million VND.

Mr. Nguyen The Nam, Head of Sales Department of Hyundai Hai Duong, said that in the first 5 months of the year, the car market was very quiet. Starting from the end of June, there were gradually signs of improvement. In July, Hyundai Hai Duong sold more than 80 cars, an increase of about 30-40% compared to April and May. The number of cars sold in the first 7 months of this year was only about 40% compared to the same period in 2022. However, according to Mr. Nam, this year's 50% reduction in registration fees is expected not to create a sudden surge in purchasing power. "With the 50% reduction in registration fees in the first 6 months of 2021, Hyundai Hai Duong's sales increased dramatically, from 100-110 cars/month to nearly 400 cars/month," Mr. Nam shared.

According to a representative of Toyota Hai Duong, from the beginning of the year to the end of July, the number of cars sold reached 510 units, a decrease of about 40% compared to the same period in 2022. In July alone, the company sold 80 units, an increase of about 30-40% compared to April and May.

The 50% reduction in registration fees for domestically produced and assembled cars is a good opportunity for consumers.

Good opportunity for consumers

When the 50% reduction in registration fees policy took effect, Mr. Nguyen Quoc Van in Gia Tan Commune (Gia Loc) decided to buy a car to enjoy the incentives. Mr. Van said: “I am researching and choosing a suitable car. This is the time that people who intend to buy a car look forward to because it will save a significant amount of money.”

Since the beginning of 2023, car manufacturers have had deep promotion programs to stimulate consumer demand. The reduction of car models at Hyundai Hai Duong is from 6-7%. Kia and Mazda have also implemented many incentive programs. Mazda CX5 is currently priced at 749 million VND, compared to last year, a decrease of nearly 100 million VND/car. Kia Sonet is one of Kia's best-selling car models, currently priced at 519 million, a decrease of 60 million VND/car compared to 2022... In addition to promotions and incentives, dealers and car manufacturers also pay attention to warranty and maintenance policies to attract customers.

The 50% reduction in registration fees only applies to domestically produced and assembled cars. However, to compete, imported cars are also running promotions and incentives with levels equal to or higher than the 50% reduction in registration fees. Mr. Do Tuan Linh, Sales Director of Mitsubishi Hai Duong, said: The Mitsubishi brand currently distributed in Vietnam is mostly imported cars, not subject to Decree 41. However, due to the very attractive promotion policy (equivalent to 50% to 150% of the registration fee value depending on the car model), Mitsubishi Hai Duong's sales have improved significantly. In July, sales were twice as high as in June. To own a Mitsubishi B-class Sedan model today, customers only need to spend less than 400 million VND (including all taxes and fees).

Although most of the cars are domestically produced and assembled, Hyundai Hai Duong also offers incentives for buyers of imported cars to enjoy no less incentives. Hyundai Stargazer is a car imported from Indonesia, the incentives for this car line in July range from 58-81 million VND depending on the version. In July, Toyota Hai Duong also implemented a promotion program with a value equivalent to 50% of the registration fee.

According to many companies and dealers, car sales are expected to increase but it is unlikely to create a breakthrough like the reductions in registration fees in previous years due to the sluggish real estate market, many businesses facing difficulties, low cash flow among people and few sudden incomes.

HUYEN TRANG