"Vietnam auto industry could splutter and die
Visitors at the fifth Vietnam Motorshow in Ho Chi Minh City last week.
Vietnam’s regional and global tax-cut commitments could mean the death of local car makers within the next ten years if there are be no improvements to the industry’s development strategy, a trade official said.
That scenario would also include an ballooning trade deficit caused by the flood of imported cars, said Ngo Van Tru, deputy director of the Heavy Industry Department at the Ministry of Industry and Trade.
Under the country’s free trade deal with the regional grouping ASEAN, car import taxes will drop to between 0 and 5 percent by 2018 from the current 83 percent. Meanwhile, the World Trade Organization commitments will make taxes on cars from the regional bloc’s members go down to 70 percent in 2014 and 47 percent in 2017.
The lower taxes would bring competitive advantages to imports in term of prices, Tru said. Even now, locally-made cars are much more expensive than their equivalents produced in other economies, he noted.
Tru estimated that the country would import US$20 billion worth of cars"
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