Vietnam Sharply Reduces Car Imports in 2005

Vietnam is estimated to import 17,000 finished cars worth US$280 million in 2005, down 24.3 per cent in terms of volume and 3.2 per cent in value against 2004, a government source said.

 

In December alone, the country imported merely 1,000 automobiles worth US$17 million compared to 2,000 units worth US$32 million in December 2004, it said.

 

A Ministry of Trade official said the sharp decline is a result of the government’s recent decision to cut special consumption tax on finished luxury sedans. Car hunters expect that next year the car price will fall as the special consumption tax falls by 30 per cent to 50 per cent, it said.

 

Vietnam is predicted to spend US$800 million on importing components for its fledging automotive industry, which is heavily reliant on component imports.

 

Last year, Vietnam imported around 22,000 cars, up 21.9 per cent against 2003.

 

Currently, there are 11 operational foreign car assemblers in the country with total investment of over US$500 million and an installed capacity of 148,000 units a year, excluding three newly licensed: Japan’s Honda, Taiwan’s VMEP and Malaysia’s JRD.
(GSO Release December 2005)