Foreign automakers demand repeal of new tariffs on imported parts

Foreign automakers demand repeal of new tariffs on imported parts

Associated Press, Hanoi

Foreign carmakers on Friday called on Vietnam to repeal plans
to increase tariffs on imported car parts during a meeting with
government officials.

The proposed tariffs would kill the current market for
Vietnam's small but growing auto industry, said the Vietnam
Automobile Manufacturers' Association, which represents the
country's 11 joint venture carmakers.

The Dec. 4 decision by the Ministry of Finance would double
the tariff on imported car parts to 40 percent in January,
followed by a further increase to 70 percent by 2004. As a
result, retail prices would jump by 15 percent next year and 35
percent by 2004, automakers said.

Members of the group, which includes Toyota, General Motors'
Daewoo, Ford, and Isuzu, met with officials from the Finance
Ministry's general tax department to air their concerns Friday
afternoon.

An official from the automakers' association said the meeting
was expected to run late into the evening. Prime Minister Phan
Van Khai, who has the final say on whether to delay, alter, or
completely withdraw the decision, will be apprised of the
meeting.

The government's abrupt decision was the second time in three
months when foreign investors' confidence had been shaken by new
import controls.

In September, Vietnam imposed a quota on imported motorbike
components, forcing the country's major assemblers, Honda and
Yamaha, to suspend production for weeks before the curbs were
eased.

Foreign investors have complained loudly about inconsistent
Vietnamese policies, saying they harm the country's business
environment by turning off much-needed potential investors.