The government calls for developing the supporting industries to reduce car production cost while restricts car use. Meanwhile, the supporting industries can only develop when car sales is high. What should we do to escape from this vicious circle?

This is really a vicious circle that a country going behind others can’t escape from. But our infrastructure can’t manage if all people use cars. Cars also go with many other problems such as environmental pollution and traffic accidents.

At first the State can’t be concerned about groups of people but has to balance the comprehensive interests. The need for cars in Vietnam is now at just around 5% of the population so we have many other urgent issues like public transport, railway and metro.

What do you think about the prices for sedans after Vietnam becomes a member of the WTO?

The price will fall but not quickly. It depends totally on taxes but I don’t yet know specific commitments of Vietnam to the partners that raise high requirements in this field like the US, Japan, and China. I only know that the import tax rates on whole-formed car and components will be reduced from now to 2010.

We have not entered the WTO but we have suffered influences from policies. Many kinds of cars have seen price reductions. What changes should we make to lower car prices?

One of the reasons that have caused car sales to fall is the enactment of the Law on thrift practice and anti-waste. Previously new chairmen and party secretaries of provinces and cities bought new cars but now they still use old ones.

However, such policies are not decisive factors, but tax. At the current high level of protection, car prices can’t fall quickly. The luxury tax rate is now 50%, import tax rate 90%, and value added tax rate 10%. It is normal that a car priced at $10,000 abroad is sold for $25,000 in Vietnam.

To cut down car prices, the State must have an itinerary to reduce taxes more quickly.

Why don’t we reduce import taxes on second-hand cars to enhance competitiveness to locally-produced cars?

I think used cars are not a solution and have no impact on economic development. The country that allows imports of used car rampantly will become the industrial refuse tip of the world. To strengthen competition, we should further open the market for imports of whole-formed cars.

Source: VNE