The Ministry of Finance (MoF) has proposed a 50 per cent cut to motor vehicle registration fees for locally-assembled and manufactured cars from July 1 to stimulate demand and ease the burden on businesses.

Vietnam’s automobile assembly and manufacturing industry has encountered many difficulties, according to the Vietnam Automobile Manufacturers’ Association (VAMA). Sales fell 44 per cent year-on-year in the first quarter.

The MoF said the policy is aimed at boosting demand and helping producers and distributors sell cars in stock as well as manufacture and assembly new vehicles and move towards the target of exporting to ASEAN countries.

Previous cuts of 50 per cent helped promote demand and industry recovery, according to the MoF.

Application of the policy over the second half of 2020 helped boost sales by 2.03-fold compared to the first half.

After a similar policy was applied from December 2021 to May 2022, sales in the first five months of 2022 surged 1.2 to 2-fold compared to the same period of 2021.