“Slash Registration Fees for Three Months: ‘Customers Spend Faster than the Six-Month Period; Imported Cars Aren’t Affected, but Locally Assembled Cars Will Soon Increase in Price'”

The announcement of reduced registration fees for three months from September 1st has sparked interest not only among consumers but also among businesses. Overall, businesses have positively appraised this policy, believing that it will help boost the market’s growth amid economic challenges. Moreover, this policy coincides with the year-end shopping season, traditionally a bustling time for sales.

However, some concerns have been raised as the policy only applies to domestically assembled cars and will be effective for a short duration of three months.

“Reduced Registration Fees Will Stimulate the Automotive Market”

The first impacted stakeholders are undoubtedly the car brands with assembly operations in Vietnam. Mercedes-Benz is one such example. The director of Mercedes-Benz Binh Duong, Mr. Nguyen Duong Vinh Nam, shared his perspective: “The 50% reduction in registration fees is a strong motivator to stimulate the automotive market, especially as we have just passed the seventh lunar month and are entering the year-end shopping season, which typically sees higher sales.”

Mr. Nam believes that this policy will serve as a catalyst to “make the year-end car market more vibrant.”

This positive impact is expected to influence not only the mass-market car segment, which has price-sensitive customers, but also luxury car buyers.

“For luxury car brands like Mercedes-Benz, while the cost reduction from registration fees may not seem significant compared to the total vehicle value, it still considerably influences buyers’ psychology. Customers in this segment typically prioritize long-term value and accompanying services. While the reduced registration fee may not be the sole deciding factor, it certainly attracts customers and expedites their purchase decisions, especially when combined with dual promotions from the brand and dealers,” added Mr. Nam.

This is not the first time the government has introduced registration fee reductions to stimulate consumption. However, while previous reductions had a six-month duration, this time it is limited to three months. Some people argue that three months may not be sufficient and will only benefit those who have already decided on their vehicle choice. In contrast, those just starting their purchasing journey may find themselves at a disadvantage due to the time constraint.

Commenting on this, Mr. Nam said, “The three-month duration for the reduced registration fee, as opposed to the previous six-month periods, can be considered a reasonable step. This short window creates a sense of urgency, encouraging consumers to make faster purchase decisions, thereby facilitating the market’s short-term recovery. Additionally, it eases the burden on the state budget while ensuring that businesses and customers do not become overly reliant on this supportive policy.”

Limited Impact on Imported Cars

From another perspective, MG Vietnam, which does not yet have any locally assembled models, will still feel a certain impact in the coming three months. The fee reduction gives domestically assembled cars a cost advantage in terms of on-road prices compared to imported vehicles.

Mr. Nguyen Xuan Hoa, Sales Manager of MG Le Van Luong, acknowledged this impact, stating that “imported cars cannot avoid feeling the pressure from locally assembled cars.”

However, for MG, he believes that this pressure is not overwhelming. The brand has always offered attractive price tags for its models. Combined with other incentives, the on-road costs of MG vehicles will not differ significantly from those that benefit from the government’s registration fee reduction.

Mr. Hoa shared that, with or without this policy, MG customers often consider locally assembled cars. However, as long as MG can meet their criteria for reasonable prices, attractive designs, and favorable bank loans, customers are inclined to choose MG. “The eighth lunar month, often considered an inauspicious time for purchases, did not hinder MG from achieving impressive sales figures in August,” he revealed.

“Registration Fee Reduction May Not Be Extended Next Year”

Amid the enthusiasm for the supportive policy, some industry insiders remain cautious.

Mr. Vu Tien, a sales consultant at Honda Tay Ho, also views the registration fee reduction positively. However, he believes that its impact will not be immediate and that the market will need to wait until after the holidays to see a significant boost. Additionally, he mentioned that customers should not expect cumulative benefits (from both the brand and the government) as “promotions from the brand are likely to decrease in the coming period.”

Sharing a similar perspective, Mr. Pham Cong Thanh, a sales consultant at BMW Nghe An, pointed out that the three-month duration, instead of the usual six months, is a notable signal.

“This year, the issue of registration fees has become more challenging. Therefore, I believe this is the last opportunity to take advantage of the tax incentive and choose a suitable and financially prudent vehicle. Next year, we may not have the benefit of reduced registration fees anymore. While the registration fee is reduced, other taxes, such as consumption tax and VAT, may increase. I hope that these three months will bring more excitement to the domestic automotive market,” Mr. Thanh concluded.