Automakers trim prices to reflect lower VAT rate

Hanoi (VNA) - Toyota and Honda have become the first automakers in Vietnam
to cut retail prices following the Government's move to reduce the value-added
tax (VAT) from 10 per cent to 5, effective this month.


The two Japanese automakers reduced retail prices by 4.4-4.6 per cent depending on
models.


Toyota , which has the widest selection of models on sale in Vietnam , with a
total of 15, cut the price of its lowest priced model, the Vios Limo sedan, from
25,500 USD to 24,400 USD, and that of its most expensive model, the Land Cruiser,
from 108,000 USD to 103,100 USD.


Honda, which sells four models in Viet Nam , lowered the price of its Civic
1.8MT sedan from 30,000 USD to 28,650 USD, while the price of its newly-launched
SUV, the CR-V 2.4 AT, was reduced from 52,000 USD to 49,700 USD.


Market watchers said other automakers in Vietnam were likely to soon follow
suit to remain competitive during the economic crisis.


Carmakers in Vietnam saw a 37 per-cent growth in sales last year, reaching
110,186 units at a time when the auto industry worldwide was bemoaning a nosedive
in sales.


Nevertheless, auto sales in Vietnam remain tiny in proportion to the nation's
overall population of over 84 million people, and the domestic auto industry saw
sales growth drop off sharply in the last months of 2008, as the global economic
slowdown hit Vietnamese consumers and the Government moved in August to triple
registration fees up to 15 per cent of the car's purchase price.


According to the Ministry of Industry and Trade , Vietnam has more than 40
automakers and over 100 auto parts producers, with a total production capacity of
over 200,000 units per year. - Enditem