Elantra of Huyndai Thanh Cong.

HA NOI (Biz Hub) –— Car manufacturers in Viet Nam are rolling out small cars at reasonable prices in an effort to speed up the market The trend follows a draft plan to develop the Viet Nam automobile industry by 2020The trend follows a draft plan to develop the Viet Nam automobile industry by 2020 with a vision to 2030 by cutting consumption tax and ownership registration fees by 50 per cent for vehicles with cylinder capacity of less than two litre.

According to Vietnam Economic Forum, automobile makers have said if the draft plan is approved long-term, they will strongly invest in manufacturing.

General Motors Vietnam is one of the manufacturers who stand to benefit. It recently introduced the new, automatic, one- litre Chevrolet Spark for VND377 million. Huyndai Thanh Cong is offering Elantra models from VND699 million to VND756 million.

Honda Vietnam in HCM City has displayed its  City model, but has yet to announce the price. In July, Vinaxuki will offer small-size VG models targeting customers in urban areas. They will sell from VND220 million to VND350 million.

Director of Hyundai Thanh Cong, Le Ngoc Duc, said policies for the industry were so changeable that his company did not dare to maintain investment in manufacture.

Duc said if the Government's coming policies were preferential and stable for domestic manufacture, his company would boost assembling in Viet Nam and attract and encourage foreign part producers to join in the country's industry.

Director of General Motors Vietnam Gaurav Gupta said the recent cut in ownership registration fee from 20 per cent to 10-15 per cent of a car's value had improved the market further and raised makers' turnover.

"We are waiting for a renovation in Viet Nam's automobile industry policies. If the Government shows preference for domestic manufacture, we will surely push up investment to increase the local-made rate, as well as roll out various new models with reasonable prices," he said.

According to the director of Vinaxuki, Bui Ngoc Huyen, if the special consumption tax rate and ownership registration fee were cut for small cars, buyers would save from US$5,000 to $7,000.

"This would bring prices down. It's really good news, not only for those who dream of possessing cars, but also to automobile makers, who hope to boost sales," said Huyen. "We wish the new policies are issued as soon as possible." — VNS