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Automobile manufacturers: Inconvenient to quote prices in VND   2009-05-02 - VietNamNet

Most automobile manufacturers have fended off questions from newspapers about why they quote sale prices in dollars. Meanwhile, Toyota Vietnam says that it is inconvenient to quote prices in VND.


Private affairs of automobile manufacturers?


As VietNamNet has reported, automobile manufacturers all quote sale prices in US$, which, according to lawyers and state offices, is a violation of Vietnamese laws on foreign currency management.


When asked about the issue, the Vietnam Automobile Manufacturers’ Association refused to give an answer, saying that it was the private affair of member companies.


Meanwhile, automobile manufacturers have also refused to answer directly.


“The person who is in the right position to give you an answer to your question is the general director who is now on a business trip abroad. Therefore, we cannot give an answer at this moment,” said Pham Thi Ha Giang, who is in charge of public relations of Mercedes Benz Vietnam.


Similarly, Ngo Thi Phuong Anh, who is in charge of public relations of Honda Vietnam, said that her deputy general director was on holiday in Singapore, and therefore, Honda Vietnam could also not release a statement at the time.


The same statements have been made by automobile manufacturers many times.


Inconvenient to quote prices in VND?


While in all other countries in the world, quoting prices in the local currency is a must, in Vietnam, automobile manufacturers complain that quoting prices in VND is inconvenient.


Akito Tachibana, General Director of Toyota Vietnam, when explaining the price quotations in US$, said that quotations in VND inconvenience both enterprises and consumers.


He said that price quotations in dollars prove to be a tradition in Vietnam, especially in quoting prices of valuable commodities like cars.


He argued that if quoting prices in VND while the VND/US$ exchange rates fluctuate all the time, the manufacturer would have to change sale prices regularly, negatively affecting business.


Meanwhile, Toyota Vietnam still has to import car parts and accessories to assemble domestically, for which it has to make payments in dollar.


The general director argued that Toyota does not violate the law on foreign currency management. The manufacturer clearly stipulates that buyers pay the US$ quoted price, but in VND, and at the exchange rate applied on the day of payment.


VAMA has also expressed the same general ideal. It said that for many reasons, transactions between sellers and buyers would be inconvenient if no hard currency was used for reference in making payment. Moreover, it suggested this was something of a tradition in Vietnam.


Nevertheless, experts say that automobile manufacturers should not cite reasons related to the exchange rate, or the habits of consumers, to explain away their violations.


The experts pointed out that state management agencies like the State Bank of Vietnam, the Market Control Agency under the Ministry of Industry and Trade have ignored the violations.


Meanwhile, when talking to VietNamNet on April 20, Governor of the State Bank of Vietnam Nguyen Van Giau said that price quotation in dollars is not popular in Vietnam. Automobile manufacturers must get a licence from the State Bank of Vietnam to make payments in dollars.


The governor said that the central bank will release a document on foreign currency management this week, which will mention commodity price quotations in dollars.

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