It looks like Saigon won’t be able to avoid the 'car age' after all. Under new import rules for 2014, autos produced by ASEAN neighbors will receive a 50 – 60% tax reduction and many fear that Vietnam’s cities will be filled with cars before major public transportation projects are complete.
These tax breaks stem from the ASEAN Trade in Goods Agreement (ATIGA), which seeks to increase trade between ASEAN nations.
If last March’s much smaller tax breaks are any indication, 2014 will see massive sales - automotive imports from Thailand and Indonesia doubled from 2012 to 8,826, worth nearly US$150 million.
In addition to the lowering of import taxes, many Vietnamese cities and provinces have reduced registration fees to 10% of the vehicle’s total value.
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According to Nguyen Van Thanh, chairman of the Viet Nam Automobile Transportation Association, we’re about to see an explosion of cars in the country, "I am sure that many people were waiting for the tax cut before buying a car," he told tienphong.vn.
This was echoed by Nguyen Van Vinh, owner of a Hanoi auto showroom who said many of his customers often asked about tax reductions.
While those in the auto industry are rightly excited, others, such as Former Director of Transport, Nguyen Xuan Thuy see a traffic-filled future, "Look at the flow of vehicles in a congestion area, we can see that small cars are the main reason. A five-seat car always carries only one or two persons."
Indeed. Head of the ministry's Transport Department, Khuat Viet Hung recently announced the results of a road study conducted in Ha Noi which revealed that, “although the number of cars is only 10 per cent that of motorbikes, they occupy 55 per cent of the road space and 60 per cent of the parking places."
While Thuy felt that keeping the number of cars in check, while quickly developing public transportation was the best option to avoid constant congestion, Hung pointed out that even EU countries with good public transportation infrastructures still suffer from serious traffic jams.
With both Saigon’s first metro line and planned BRT system at least 4 years away, Saigon’s streets may soon become unbearable to drive.
[VNS // Photo via Sippanont Samchai]
