A new report from the general Department of Customs showed that over 4,800 cars of nine seats of fewer were imported to Vietnam in the first half of March, bringing the total number to over 14,400 units since the beginning of this year, a 2.5-fold increase on the same period last year.

The sharp rise in car imports from Indonesia and Thailand was partly because of tariffs falling from 40 percent to 30 percent, the report said.

According to the report, average imported car price in these two countries was now just VND189 million a car excluding taxes and fees which is a sharp fall compared to that of VND250 million last month and VND383 million last year.

Large auto companies in Vietnam say they will reduce the production and assembly of some models and switch to imports from Thailand and Indonesia when import tariffs fall to zero per cent following the regional trade agreements coming into effect from 2018.

Deputy PM Trinh Dinh Dung has recently asked the Ministry of Industry and Trade to cooperate with agencies to study measures to assist the local auto industry to cope with rising competition from import companies.

Dung urged the Ministry to consider the introduction of safeguards to protect domestic auto manufacturers from cheap imports.