Tuesday, October 02, 2007

Vietnam may slash automobile import taxes

Vietnam may slash automobile import taxes

HANOI, Oct. 1 (Xinhua) -- Vietnam is likely to reduce import taxes on completely-built automobiles if car producers in the country do not cut their products' selling prices, local newspaper Vietnam News reported Monday.

Reduced tariffs would facilitate the automobile imports, forcing the automakers to lower the prices, the paper quoted Vietnamese Finance Minister Vu Van Ninh as saying.

"If local companies do not lower prices, customers will choose imported high-quality cars," he said.

However, most of the automobile manufacturers seem unfazed by the potential tariff reduction. Mercedes Vietnam is the sole firm having lowered prices. It has cut selling prices of its E-class models by 3,000 U.S. dollars to 100,000 dollars.

Several small automobile manufacturers said poor profits over the last two years made it impossible to cut prices.

Vietnam, which reduced tariff on completely-built cars to 70 percent from 80 percent nearly two months ago, imported 14,000 completely-built automobiles worth 271 million U.S. dollars in the first eight months of this year, posting respective surges of 62.2 percent and 92.5 percent, according to the General Statistics Office.

Vietnam currently houses 13 automobile joint ventures between foreign firms and local ones with a total registered capital of nearly 700 million dollars and combined annual capacity of 173,000 units. Besides, it has dozens of local enterprises specializing in producing automobile parts and assembling simple vehicles.

Early last year, Vietnam, with a population of more than 83 million, had some 700,000 private-owned cars compared with 17 million motorbikes, according to statistics from the Transport Ministry.