Vietnam conglomerate Thaco calls for extension to car registration fee discounts

Thaco Group, one of Vietnam’s leading private conglomerates, has proposed a 50% reduction in registration fees for domestically produced and assembled automobiles be continued for an appropriate period of time.

The deadline for paying a special consumption tax on domestically produced and assembled vehicles should also be extended throughout 2024, it said in a recent proposal to the authorities of Quang Nam province in central Vietnam.

According to Thaco, in 2023, the difficult economic situation had a strong impact on shopping demand. Notably, the automobile market witnessed a sharp decline, with car sales estimated at 330,026 vehicles, down 24% from 2022, and even lower than the pre-pandemic levels of 362,628 and 344,127 in 2020 and 2021, respectively.

Since 2020, automobile manufacturing and assembling enterprises have been severely affected by the pandemic's impacts and economic downturn. In that context, the government, ministries and central agencies have promptly issued many breakthrough support policies, helping the auto industry overcome difficulties.

The support policies included reducing registration fees for domestically produced and assembled automobiles, extending the deadline for paying a special consumption tax on domestically produced and assembled cars, and reducing minimum output in a tax incentive program.

Thaco believes that the above policies have provided timely support and brought practical results to businesses. In particular, the policy of reducing registration fees by 50% provided financial support for people and businesses while stimulating domestic consumption. In addition, it also helped car makers have more cash flow to maintain production and business, thereby increasing state budget contributions.

Many forecasts show that the world and domestic economies may continue to decline and are unlikely to recover in 2024 or 2025.

If stimulus policies are not implemented by central and local agencies, inventories are forecast to keep rising, resulting in a series of additional costs such as storage for finished vehicles and repair/maintenance costs for stored vehicles, making it difficult for businesses to maintain production and business activities, Thaco noted.

Therefore, in order to have timely and practical support solutions to promote socio-economic development in 2024, the company suggested Quang Nam’s authorities propose the government and Prime Minister add breakthrough support policies to the 2024 socio-economic recovery and development program as implemented in the 2020-2023 period to support businesses and people.

“As socio-economic difficulties are forecast to linger, new support policies should be issued soon and applied from the first quarter of 2024," the firm said.

In response, the People's Committee of Quang Nam province assigned the Department of Planning and Investment to coordinate with relevant agencies, units and localities to research policies to support socio-economic recovery and development in 2024 proposed by Thaco for submission to the government for approval.