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November 6, 2006

VIETNAM: Tax rises hit car sales

Vehicle sales by a dozen foreign-backed firms fell 14.5% in the first 10 months of this year from a year earlier to 24,094, an industry group said on Monday.

Vehicle sales by a dozen foreign-backed firms fell 14.5% in the first 10 months of this year from a year earlier to 24,094, an industry group said on Monday.

Figures from the Vietnam Automobile Manufacturers Association cited by Reuters showed Toyota extended its dominant position, with 10-month sales rising 17% to 10,963.

Auto sales have been falling since Vietnam imposed a higher consumer tax on locally assembled vehicles in January 2005, the news agency noted.

Honda Motor raised its sales last month to 516 vehicles from 27 in August, when it entered Vietnam’s market with the Civic.

But most of the other makers reported sale declines – Vietnam’s annual per capita income remains one of the world’s lowest at around $US640, but its car prices are among the highest because of high tariffs and taxes.

A Toyota Camry sells for around $50,000 compared with $20,000 in Japan, Reuters noted.

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