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Is Vietnam's Motorbike-Clogged Streets Ready for Carmageddon?

by Ha Nguyen

   HO CHI MINH CITY --

   What do you get when you mix a British soccer star, a French auto show,
   and a Vietnamese conglomerate? It sounds like a setup for a joke, but
   the answer is VinFast, the first luxury car built in Vietnam.

   The new car debuted at a Paris exhibition in October with some public
   relations help from soccer superstar David Beckham.

   The unveiling signaled a turning point not just for Vietnam's car
   manufacturing industry, but also for the Communist country's
   transportation landscape.

   Although it has close to one motorbike for every two people, Vietnam is
   quickly ditching its iconic two-wheel transportation for cars.

   That has left a question on some people's minds: Is the country ready
   for "carmageddon"?

   Car ownership is expected to climb drastically in the coming years, but
   from the narrow alleys to the lack of sufficient bridges, Vietnam's
   creaking infrastructure was not built for millions of four-wheel
   vehicles. The automobile also does not bode well for pollution or
   congestion in a country of almost 100 million people. Vietnam fears it
   will be among the places worst hit by climate change.

   Still, the cars are coming. U.S. auto giant Ford, for example, saw a
   new record in monthly turnover in November, when it sold 3,466 vehicles
   to Vietnamese shoppers. That was a 44 percent jump compared with sales
   in the same period in 2017. The automaker also recently introduced
   three more makes to the domestic market.

   "Things are really coming together for us to close out the year,
   including a series of successful new vehicle launches," said Pham Van
   Dung, who is managing director of Ford Vietnam.

   The reasons for the growth overall are higher annual incomes, as well
   as lower taxes. In particular the Vietnamese government dropped import
   taxes to zero in January as part of an agreement among the Association
   of Southeast Asian Nations. That fed predictions that cars would flood
   into Vietnam, since there are no tariffs if the cars are produced in
   Thailand, Indonesia, or elsewhere in the region. Without the deal,
   tariffs could double the final cost of an automobile. Data from October
   show car imports nearly doubled this year compared to last year.

   'That growth raises the chances that Vietnam's biggest cities, Hanoi
   and Ho Chi Minh City, are fated to be another Bangkok, Jakarta, or
   Manila in the near future. Those Southeast Asian nations are far more
   gridlocked than Vietnam's megacities, even though they also number
   about 10 million residents, That's because they depend more on cars
   than mopeds, unlike Vietnam.

   Public transit and ride-sharing are options to stave off carmageddon.
   Uber, Lyft, and Grab made ride-hailing apps that they say can decrease
   car ownership -- and thus, traffic -- by getting more people to
   carpool.

   "Grab plans to work with partners to create a more efficient transport
   network that will ease traffic congestion in Southeast Asia's
   megacities [and] make mobility accessible for all," the Malaysia-based
   app-maker said in a statement.

   If the Vietnamese are not going to drive, they need alternatives.
   People do take the bus, but the public fleet is aging, and drivers
   often skip stations or roll to crawl rather than stop completely to let
   riders on and off. A subway system is planned to launch in Hanoi in
   2019, but its counterpart in Ho Chi Minh City has faced repeated and
   potentially permanent delays.

   The influx of cars has implications far beyond the auto sector.
   Developer CBRE said in a report this month that it has left a sizable
   imprint on the local property market.

   "From the real estate perspective, the most important aspect for market
   shift and macroeconomic conditions is the increased demand and
   expansion of industrial production [of cars]," the report said. "In
   fact, there have been major industrial and commercial lease deals
   related to the automobile sector over the past three years, with
   anticipated demand for lease extensions in future periods."

   That industrial production underlies a key quandary for policymakers.
   On the one hand, they want Vietnam to develop its own robust car
   manufacturing industry, to contribute to the economy in the vein of
   South Korea or Japan. On the other hand, they worry about exacerbating
   climate change, which could ravage Vietnam's long coastline, drive
   salty water into the deltas and farmlands, and flood cities. The rise
   of cars, with all their greenhouse-gas-emitting tailpipes, certainly
   won't help the tropical country in its battle with climate change.