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.