Regarding the auto price issue, Minister Hung said VAMA has the rights to maintain car prices and the State does not interfere in the selling prices of automobile enterprises. This is the fight between consumers and producers.

In recent years, the special consumption duty on imported cars has been adjusted while import tariffs will also be adjusted in accordance with the international integration process. If Vietnam joins the World Trade Organisation by 2006, import tariffs will be further reduced. At first, the special consumption duty should be adjusted, down 30 percent for imported cars while up 10 percent for locally-assembly cars. Formerly, the tax was expected to increase by 80 percent for both imported cars and locally assembled cars. Therefore, the quality of locally assembled cars should be improved to fetch reasonable price in future.

Minister Hung proposed a formula that is considered suitable as it takes into account the production cost and profit plus half as much as import tax. Domestic car prices may be less expensive than imported car prices, just half as much as the import tax to make it possible for consumers to buy.

The State wants to have a strong automobile production industry. Therefore, the State has to offer preferential treatment for automobile producers, and consumers have to accept the price. On the other hand, producers must further invest in localising automobile accessories, modernising technology and increasing management capacity in order to fix acceptable selling prices. Accordingly, a close link can be created among the State, producers and consumers.

Vietnam can draw a lesson from the management of China’s automobile sector. After joining the World Trade Organisation (WTO), China reduced car import tariffs, thus boosting the development of Chinese automobile production. It is hoped that Vietnam’s automobile production sector will further develop. Automobile producers will not only think of their immediate benefit, but also how to reduce cost of car production. It is impossible for them to maintain the current prices.

At present, there is a raising concern that Vietnam’s transport infrastructure development cannot keep up with the development of the automobile sector. Thus, it is very important to look at the benefits of consumers and the whole community. Together with solutions for reducing car prices, Vietnam will go ahead with a strategy to develop transport infrastructure, which was approved by the Government recently.