Vietnam raises car tariffs to 83% to curb imports

HANOI, April 21 (Reuters) – Vietnam, in an effort to discourage more motor vehicle purchases because of poor roads and traffic congestion, hiked tariffs on imported cars for the second time in less than a month, dealers said.

Tariffs on car imports rose to 83 percent from 60 percent in a move that one Hanoi-based car importer said “would make imported cars at least 10 percent more expensive than now and that would reduce demand significantly”.

Car imports in the first quarter of 2008 totalled nearly 10,000 vehicles worth $124 million, compared with $192 million in all of 2007, statistics showed.

Car sales in the communist-run economy, which has been growing an average 7.5 percent since 2000, have surged in recent years as people switched from motorcycles, but customers often have to wait for months for their car to be delivered.

Per capita annual income remains one of the lowest in the world at about $835, but a growing urban middle class in the country of 85 million is able to afford cars.

Many Vietnamese prefer to buy imported cars, which are only slightly more expensive than locally assembled vehicles but often regarded as better quality, dealers said.

State media also reported that the government had also raised tariffs on parts imported by local assemblers by 3 to 5 percent.

http://www.reuters.com/article/rbssConsumerGoodsAndRetailNews/idUSHAN20780420080421

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