The increased registration and license plate application fees have recently dampened the auto market, with sales of many car dealers suffering deep slumps.

Many Toyota Vietnam and Ford Vietnam dealers based in Ho Chi Minh City said their businesses have been put in a tough spot recently, as most customers have scrambled to purchase cars before the new fees become applicable, newswire Saigon Times Online reported.

The Vietnam Automobile Manufacturers Association (VAMA), which holds the largest market share of the locally assembled automobiles, said it’s members’ sales in the first month of the year are expected to drop by more than 50 percent against the same period last year, or by 40 percent month on month.

According to Saigon Times Online, Toyota Vietnam only managed to sell 1,540 vehicles in January, which is a 50 percent year-on-year decline. GM Vietnam’s sales last month were 560 vehicles, down by 44 percent year on year, while the respective figures of Honda Vietnam, Mercedes-Benz Vietnam, and Ford Vietnam were 33, 71, and 172 automobiles.

Registration fees and license plate fees were increased to 10 times the earlier price in HCMC and Hanoi since the beginning of the year, when the Circular 20 of the Ministry of Industry and Trade took effect.

The Circular also helped eliminate unauthorized auto importers, causing a slump in the sales of imported sedans.

Automakers thus posted a low outlook on the market.

For instance, Ford Vietnam CEO Laurent Charpentier said the automobile market will face difficulties in the first half of this year, due to economic slowdowns and hiked fees.

Meanwhile, GM Vietnam CEO Gaurav Gupta said the increased registration fees had put an adverse impact on the automakers in Vietnam.

“The higher fees mean that consumers have to spend an extra sum on their car purchase, which may lead to reduced sales,” he said.

For his part, Toyota Vietnam CEO Akito Tachibana said automobile demand is expected to drop as the expense of affording a sedan has soared.

“We will have to revise our business and production plan for this year,” he shared.

Source: Tuoitrenews