Vietnam is to allow the import of second-hand cars from May, which, plus a potential wave of low- cost Chinese automobiles, will drive vehicle prices in the country down, the local newspaper Pioneer reported Monday.

Under a recent government decree on management of imports and exports in the 2006-2010 period, foreign cars which have been used for five years downward are eligible for being imported from May 1.

According to reliable sources, they will bear import tax of 135 percent, the paper said, noting that the current tariff on new cars is 90 percent.

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

Future influx of second-hand cars and Chinese new vehicles will force carmakers in Vietnam to lower their products' prices, the newspaper said, noting that many local firms are making preparation for assembling Chinese cars with fine styles and competitive prices.

Vietnam spent 88 million U.S. dollars importing 1,400 completely-built automobiles and different components for assembly in January, up 4.7 percent in total import value over last January, according to the country's General Statistics Office.

Eleven joint ventures in the country made total sales of 1,517 vehicles in January, compared with 2,370 units in January 2005, according to the Vietnam Automobile Manufacturers Association.

Source: Xinhua