CBU vehicles to increase in price by 15 to 30% when new special consumption tax regime takes effect on January 1.
The price of imported completely-built-unit (CBU) motor vehicles will increase by 15 to 30 per cent from January 1 due to the new special consumption tax regime.
Sales by VAMA members in November increased 33 per cent compared to October and 86 per cent compared to November last year. Many therefore predicted an explosion in the motor vehicle market.
The reality, however, may be somewhat different. In three week’s time the new special consumption tax regime will take effect, pursuant to Decree No. 108/2015/ND-CP, with retail prices of CBU vehicles rising 15 to 30 per cent as a result. The new tax will be calculated based on the wholesale price of the importer instead of being based on the CIF (Cost, Insurance, Freight) price and import tariff, as previously.
The new Ford Everest, for example, which was first promoted in the market six months ago, was expected to be priced at between VND900 million ($39,940) and VND1.2 billion ($53,250) when it becomes available in the new year. The actual price, however, will be VND1.249 billion ($55,430) for the Trend AT 2.2L 4x2 and VND1.629 billion ($72,295) for the Titanium AT 3.2L 4x4, as announced by Ford Vietnam. The additional 15 per cent special consumption tax makes a huge difference in price compared to its competitors such as the Toyota Fortuner, Hyundai SantaFe, and Mazda CX-9.
The response from customers to the impending price rise has been clear, with sales of CBU vehicles in November rising 95 per cent compared to October.