The country imported roughly 2,500 automobiles, down 77.3 percent against the previous month, the GSO reported. In December 2009 alone, 11,000 automobiles totalling US$192 million were imported.

Last year, the country recorded imports of roughly 76,300 automobiles, worth more than US$1.17 billion, up 49.4 percent and 12.6 percent respectively from 2008, the GSO said.

The sharp decrease in January 2010 is attributed to the impact of the Government’s decision to remove tax incentives from the auto industry. After months of enjoying a VAT and car registration discount, car buyers now have to pay additional charges that are estimated to increase the cost of buying a car by roughly 10-12 percent.

General Director of Toyota Vietnam, Akito Tachibana, says that the domestic automobile market would suffer from increasing costs in the first few months of the year. However, it was expected to rebound at the end of the year so that total sales would match those of last year, he adds.

It is predicted that automobile imports in February would continue to drop. According to the General Director of the Asia Automobile Liability Limited Company, Laurent Genet, car imports will drop sharply because of bold Government measures to restrict the import of luxury goods.