The reduction aims to boost consumer spending for three months.
Vietnam's government has issued Decree No. 109/2024/ND-CP, which cuts registration fees by 50 per cent for domestically produced and assembled vehicles, including automobiles, trailers, and semi-trailers.
Effective from September 1, 2024, until November 30, 2024, the reduced fees will apply in accordance with the government's previous Decree No. 10/2022/ND-CP.
From December 1, 2024, the registration fees will revert to the original rates set out in the earlier decree and relevant local regulations.
The reduction aims to boost consumer spending, provide financial relief to individuals and businesses, and support the recovery of Vietnam's domestic automobile manufacturing sector, which has been struggling with economic headwinds.
The Ministry of Finance noted that at the start of 2024, the domestic auto industry, like the broader economy, faced significant challenges from inflation, rising exchange rates, and fluctuating gold prices. These factors dampened consumer confidence, leading to tighter spending on high-value items such as cars.
The Vietnam Automobile Manufacturers Association reported that in the first quarter of 2024, vehicle sales fell by 17 per cent year-on-year to 58,165 units, with passenger car sales down 21 per cent, commercial vehicle sales down 6 per cent, and special-purpose vehicle sales down 48 per cent.
As the economy begins to recover, the auto industry continues to face challenges, including global economic slowdowns, geopolitical tensions, and supply chain disruptions. While domestic vehicle production and sales have declined, imports have surged, driven by deep discounts from distributors.
Vietnam's commitments under 17 free trade agreements, including reductions in import tariffs on cars to zero per cent, have added further pressure on the domestic auto industry.
Against this backdrop, the government’s decision to cut registration fees is seen as a critical measure to help stabilize production, maintain sales, and support the sector's recovery.
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