Auto manufacturers and dealers are concerned that their sales might go down since a possible car registration fee reduction could lead consumers to suspend their purchase plans.

The Government is working on the draft of a resolution thrashing out measures designed to help the corporate sector the difficulties for production and business activities, including lowering the automobile registration fee.

If the resolution comes out, the fee for cars with fewer than 10 seats would fall to 10%.

The auto market has long been sluggish, so the forthcoming Government move would drive up auto consumption, especially in the shopping season in the lead up to the Lunar New Year holiday.

Some said the timing of the car registration fee cut is not appropriate.

A source from Ford Vietnam said the company had asked some customers to take delivery in late December, but those buyers have asked for a rescheduling of the delivery. It has occurred mostly at Ford sales agents in Hanoi.

Nguyen Mot, communication director of Truong Hai Auto, said the information about car registration fee reduction had affected the purchase decisions of customers in Hanoi. The sales in Hanoi in the last few days are 20% lower than expected by Truong Hai.

According to the Government's draft resolution, the registration fee for below 10-seat cars would be slashed to 10%. City and provincial authorities could decide to add up to five percentage points, making the total 15%.

The change is insignificant, though. The current fee in Hanoi is already 20%, said Mot. "At present, HCMC is levying a fee of 15% and Quang Binh is charging 12%. I believe the city would not lower the fee to 10% like other parts of the country," he said.

The upcoming lowering of the fee might have little impact o­n the Hanoi market. However, the fee would not actually go down until the nearest People's Council meeting, which is slated for March.

Until then, auto dealers are worried their sales in Hanoi, one of the two biggest markets in Vietnam, may be affected.

Experts also share this view, saying that when the resolution is officially released, there would be scope for city and provincial authorities to decide their car registration fee. Then, the decree on car registration fees should be revised to be consistent with the new regulation.

In addition, the decree would require a guidance circular that will take some time to come out, so a lower fee would not be introduced soon enough to create new auto sales momentum.