Car Makers in Vietnam Likely to be Inspected 

The Ministry of Finance plans to inspect car prices and real profits of in automobile manufacturers in Vietnam to deal with soaring prices of luxury cars on the local market at present.

Prices of locally-assembled cars are too high so far, three times higher than that in developed countries, resulted in huge amounts of money spent on imports of material. In addition, all 11 car manufacturers in Vietnam are running at only 30-40 per cent of their capacity per annum but the small-scale car market, with an unchangeable purchasing power, has recently always faced a shortage of cars at the time car prices are increasing.      

According to estimations of the Ministry of Finance, it is unreasonable as the import value of car parts in recent years has been much higher than the import value of completely-built models.

Prices of luxury cars in Vietnam have risen sharply as most car makers reported their running out of products to be sold in 2004 and the rise in the special consumption tax to 40 per cent from the current 24 per cent will come into effect from January 1, 2005.

At present, car speculators are now selling orders to buy cars at the prices in 2004 with differentials of between US$3,000 and US$7,000 each, which depends on the value of the vehicle. They are now re-selling Mercedes-Benz E200K at US$90,000 (US$7,000 higher than in September), Toyota Camry 2.4 at US$50,000-51,000 (US$4,000-5,000 higher than Toyota quotation), Toyota Camry 3.0 at US$61,000-62,000 (US$3,000-4,000 higher) and Ford Mondeo at US$47,000 (US$3,000 higher than Ford quotation).

According to car hunters, the new tax rate will lift retail prices by US$8,000 to US$10,000 for cars currently sold between US$50,000-65,000.

According to the Vietnam Automobile Manufacturers Association's (VAMA) release, eleven foreign-invested car joint ventures in Vietnam sold 27,310 units in the first ten months of this year, down 9.3 per cent year on year. Last year, they sold 42,557 cars in 2003, a sharp rise from 26,873 in 2002.

• P.V