Vietnam seeks phased-in auto parts tariff rise
HANOI - Vietnam has proposed a graduated increase in car
part tariffs to a ceiling of 50 percent by
2005 in a compromise to soothe foreign
auto makers' concerns about an abrupt
hike in duties, car manufacturers said
on Wednesday.
The companies said the rise in tariffs --
Vietnam's attempt to boost the use of
more locally made parts -- would cripple
a small but fast-growing sector. Sales of
cars rose about 37 percent in 2002 from
2001 as incomes rose.
The Ministry of Finance has
recommended that the import tax on
auto components, currently at 20
percent, to rise to 30 percent by April 1,
2003, 40 percent by January 1, 2004,
and 50 percent by the following year,
Nguyen Van Quy, vice-director of
Korean-Vietnamese venture Vidamco,
told Reuters.
Previously, the tariff hike was to have
taken place all at once. Officials from the
ministry were not available for comment.
Vidamco, or Vietnam Daewoo Motor Co,
is a member of the Vietnam Automobile
Manufacturers Association (VAMA) that
lobbied against the tariff increase. Other
members are Germany's
Mercedes-Benz and
Japan's Toyota Motor Co .
The eleven foreign auto makers
operating in the country have until March
1 to respond to the proposal.
Quy said the revisions were unlikely to
please his fellow car manufacturers.
"Some companies' representatives and even some government officials attending the meeting rejected
the decision, and VAMA is going to send a proposal to government on that before 1st of March," he said.
"If the government wants to kill the industry, it should do it right now, not step-by-step like that," Quy
added.
Most of Vietnam's 80 million population travel by motorcycle, which were also slapped with restrictions
on imported parts last year.
Reuters - February 26, 2003.
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