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Car imports down sharply as people tighten their purse strings   2009-02-26 - VietNamNet/TBKTVN

The car import turnover in the first two months of the year has seen a sharp decrease in comparison with the same period of the last year, according to the General Statistics Office (GSO).


In January 2009, Vietnam imported 1,300 cars under the form of complete built unit (CBU) with the total import turnover of US $27 million. It is estimated that the number of cars to be imported in February will be the same, though the import turnover is expected to be a little higher at Us $30 million.


As such, the CBU car import turnover of the first two months of the year is just equal to a half of the import turnover in December 2008, US $57.3 million in turnover and 2,000 imported cars respectively. December proved to be the month which saw the highest number of imported CBU cars in the fourth quarter of 2008.


If comparing with the same period of 2008, the CBU car import turnover in the first two months of the year saw a sharp decrease in both term of quantity and value. There was 24.7% in quantity and 27% in value.


The sharp decrease of CBU car imports in the first two months of the year has been anticipated. In the context of the global economic recession, when businesses have to cut down expenses and people have to tighten their purse strings, the demand for cars remains very low.


A question may be raised that why the imports were still high in December 2008, when the global economic recession had already began. In explaining this, analysts said that the imports were high in that month because the demand for cars increased sharply in the month before the traditional Tet. After the peak month, the demand for cars has decreased again, which truly reflects the current situation of the market.


The Government plans to apply a series of policies in order to stimulate the demand, including the measures to stimulate the car market, which aims to help settle the difficulties for the local automobile production.


However, analysts said that the policies will have direct impacts on the market of domestically made cars and on local automobile manufacturers while they do not aim to encourage the consumption of imports.


The Ministry of Finance is considering lowering the import tax on car parts and accessories for local assembling between another 2-5%


Under the draft decision on tax reduction being compiled by the Ministry of Finance, the import tax on engine will reduce from between 22-23% to 20%, while the tax on engine parts from 20% to 15%. An unfinished gear box will bear the tax rate of 20% instead of 23%, while a gear box’s parts will see the tax reduce from 15% to 10%.


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