VietNamNet Bridge – HCM City is considering applying a quota scheme for private car ownership, which could affect car sales.

The HCM City Transport Department has proposed restricting the number of private cars in circulation with the aim of promoting and developing public means of transport.

Under the plan drafted by the department, only a certain number of private cars would be licensed every year, depending on infrastructure conditions.

People will have to attend auctions to obtain the right to possess cars and put their cars in circulation. They also must prove that they have places to park their cars.

The department also tries to restrict the number of private cars in circulation by suggesting the raising of taxes and fees, including luxury tax, ownership registration tax and environmental fees.

A report showed that there would be about 3 million automobiles, 50 percent of which would be sedans and the rest with up to 9 seats, in the city by 2030.

The department believes that it is necessary to immediately restrict the number of cars sold and registered.

The transport department’s proposed plan has worried automobile manufacturers. They commented that the plan, if approved, will be contrary to the national program on developing the automobile industry.

The manufacturers cited the government’s automobile-industry development strategy approved in July 2014 which says that passenger cars with up to nine seats will be the focus of the strategy.

The document includes an article that says all new policies in the future must show the spirit of the strategy and must not be contrary to the approved strategy. The related policies must be consistent and stable for at least 10 years.

An automobile manufacturer noted that the suggestion made by the city’s transport department would hinder the development of cars under nine seats.

This would badly affect the automobile manufacturers because HCM City is a large market which buys 30 percent of the output.

He said if city authorities approve the transport department’s plan, the revenue from taxes and fees would not increase as expected.

In 2013, HCM City alone imposed a tax rate of 15 percent on car buyers, though other localities imposed a tax rate of 10 percent only. As a result, car buyers registered their car ownership in neighboring provinces and cities.

He said the measure would not help reduce the number of cars sold, and would also make it more difficult for the city’s taxation body to collect taxes from car buyers.

Tran Thuy