The automobile market survived Covid-19, the Government agreed to reduce the registration fee by 50%, and the appearance of new items, including electric cars. These were the landmarks of the Vietnamese auto market in 2021.

The automobile market has become bustling again after the Government cut by 50 percent the vehicle registration tax.

If it is approved, the 50% cut in the car registration fee may take effect from November and last for six months. The cut is expected to boost the auto market after a long period of being affected by Covid-19.

Although car manufacturers have cut prices deeply to stimulate demand, the Vietnamese auto market witnessed a record decrease in monthly sales over the past five years when fewer than 9,000 cars were sold in August 2021.

From 2021, when the preferential registration tax policy is removed, domestically made cars will be at a disadvantage compared with imports.

Car sales in Vietnam have been forecasted to hit the record high of 400,000 by the end of this year.

The rising vehicle imports are posing huge competitive pressure on domestically-produced vehicles.

The country’s largest engine and machinery producer Vietnam Engine and Agricultural Machinery Corporation (VEAM) risks massive loss due to a large stock of unsold trucks built up since before 2017.