Prime Minister Pham Minh Chinh has asked the Ministry of Finance to halve registration fees for locally-made or assembled automobiles starting July 1.
A draft decree on the issue should be submitted to the Government for approval before June 15, he said.
The cut will be in effect until the end of this year to boost falling demand.
The registration fees are calculated based on car prices in each locality. The rates are 12% in Hanoi and Hai Phong, and 10% in HCMC.
The Vietnam Automobile Manufacturers Association (VAMA) said credit tightening and rising interest rates have diminished market liquidity, and automobile companies are struggling to cope with high inventories.
In the first four months VAMA saw 92,801 cars sold, down 30% year-on-year.
Experts have predicted that total vehicle sales this year will unlikely reach last year’s figure of half a million units.