Vietnam is likely to allow dealers to import second-hand cars, local newspaper Vietnam News Wednesday quoted a source close to the Vietnamese government office as saying.

Under a draft on management of imports and exports in the 2006- 2010 period, the government has planned to allow import of cars which have been used for five years downward. The vehicles will bear import tax of 150 percent and special consumption tax of 100 percent.

While the draft is worrying local automakers, it is good news for traders and buyers.

Director of Tay Ho Investment and Development Company in Hanoi City Truong Van Duc said that the average price of a used car branded Camry in the United States is about 2,000 U.S. dollars, and the freight to Vietnam is some 500 dollars. When calculated with import tax and special consumption tax, its price in Vietnam will be around 15,000 dollars, less than half the price of a brand- new Camry assembled in Vietnam.

Duc said there are four most potential markets from which Vietnamese traders import second-hand cars: the United States, Australia, Laos and Cambodia. He said prices of cars in Vietnam, the highest in the world, should decrease by some 20 percent to be competitive with imported used vehicles.

According to Vietnam's Industry Ministry, an automobile industry development plan approved for the 2010-2020 period by the government anticipates domestic demand of just 113,000 vehicles by 2010. However, the total annual manufacturing capacity of existing enterprises will hit 120,000 by then.

There are around 200 local and foreign-invested firms involved in businesses of manufacture, assembly and repair of automobiles in Vietnam, and 90 of them are specialized in automobile production and assembly, said the report.

Vietnam spent nearly 1.1 billion dollars on importing 17,000 completely-built automobiles and different components for assembly in 2005, posting a year-on-year increase of 19.3 percent in total import value, according to the country's General Statistics Office.

Source: Xinhua