The Ministry of Finance on March 11 raised the import tariff on CBUs from 60 percent to 70 percent as part of a Government drive to reduce traffic congestion by curbing the mass importation of automobiles into the country.

Ha Minh Tuan, general director of Hyundai Motor Vietnam, the country’s biggest importer of Korean Hyundai brand, said the company will increase sales prices for all models by an average of 6 percent.

Meanwhile, Vinh Hoang Co in Hai Phong, the biggest car importer in the North, said it would add US$2,700 to the price of the Toyota Camry LE 2.4, one of its best selling models for a price of US$56,000. Some luxury models such as the Lexus470 and BMW X5 will see an average of US$5,000 added to the retail prices.

Euro Auto, importer of German luxury brand BMW, said it would raise the price of all its models by 10-15 percent. However, the company said it would offer a number of sales promotional campaigns this month to bolster demand.

The Ho Chi Minh City-based firm said it would give buyers of BMW3 series and BMW5 series some add-ons to the ears worth some US$6,000.

According to the General Statistics Office, in the January-February period imports of CBUs rose by 328 percent year-on-year. A total 10,000 units were imported into the country at a total value of US$187 million.

The country imported 28,000 CBUs last year, up 223 percent over 2006, while the CBU import value for 2007 reached a record US$523 million, up US$208 million over 2006.

Experts said the Government had attempted to force local auto makers to reduce sales prices by cutting import tariffs on CBUs and used cars but the price of locally-made cars remained the same.

Car prices in Vietnam are considered among the highest in the world, about 60 percent higher than in Europe and 30-40 percent higher than in regional countries.