The prices of domestically manufactured cars will be reduced further if the import tariff on automobile spare parts is adjusted down.
Currently, Ministry of Finance is working on a draft to cut down another 2-5% on the import duty on spare parts used for the domestic automobile assembly and production.
Under the draft, the tariff on engine import will be cut from 22-23% to 20% while that on engine components will be reduced from 20% to 15%, completely un-assembled gearbox from 23% to 20%, gearbox down from 15% to 10%, clutch and clutch components from 25% to 20%.
A representative from Vietnam Automobile Manufactures Association (VAMA) said that reducing further the import duty on automobile spare parts is reasonable as the car manufacturing industry is facing many difficulties.
In the middle of 2008, the prices of domestically produced cars were raised after two import tariff increases. In which, the import duty on spare parts such as optical cables (used in automobile manufacturing) increased by 5-10% under the Ministry of Finance’s Decision No 5/2008/QD-BTC while that on gearbox, exhaust pipe rose by 3-5% pursuant to Decision No 37/2008/QD-BTC.
Reportedly, the car sales in January 2009 only reached 3,852 vehicles, equalling to one third of the figure of last December.
Recently, the domestic car market reduced the car prices by 5% after the VAT on automobiles was cut 5%.