The way we drive now and a look
at the plans and problems that lie
ahead. By Tom DiChristopher.
It's just an average morning on Ton Duc
Thang Street. A line of lorries is backed up
from the intersection at Le Thanh Ton to
Nguyen Hue, and taxis are parked along
the river, leaving cars, motorbikes and yet
more taxis to jockey for space in the re-
maining lanes. Up the road, there’s a group
of school kids on bicycles wobbling away,
three abreast; further, a three-wheeled
cart is feeding the bottleneck.
According to the Committee for
Traffic and Safety, more than 3.8 million
motorbikes and 383,000 private cars share
the streets with trucks and buses in HCM
City. On top of that, about one million
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motorbikes and 60,000 cars commute into
the city every day. And in the immediate
years to come, all signs say the streets are
just getting more crowded.
The city has reacted to the increasing
congestion, at times dispensing police
to problem areas and cracking down on
illegal parking, but in the long term, big
picture solutions are necessary, both to
prevent traffic jams from worsening and to
alleviate the city’s smog-choked skies. Such
initiatives are under way, but in order to
work, they need to take stock of the pres-
ent and learn from the past.
 Motorbike Mania
It’s easy to blame the increasing number
of cars on the roads for HCM City’s traffic
woes, but while their size is problematic on
the city’s small streets, currently it’s mo-
torbikes that are flooding the city at wildly
unsustainable levels.
Every day, the city registers about 1,000
new motorbikes. Demand is such that sales
for popular models like the Honda Air Blade
are remaining steady even though they’re
now selling for about five million VND above
the manufacturers suggested retail price. If a
buyer can’t afford that, imitation motorbikes
can be had for about six to nine million VND.
So far, measures to limit motorbike
growth have fallen flat. When the govern-
ment began denying registration in certain
parts of the city last year, people just regis-
tered them elsewhere under family names.
At times, it seems like the only option is to
make it too expensive or onerous to drive a
motorbike; policy proposals have included
banning imports, raising gas prices and limit-
ing motorbike parking.
Motorbikes are also at the root of the
city’s air quality crisis. While most cars meet
Euro II standards throughout Vietnam,
motorbike emissions policy is just emerging.
In a pre-proposal study for a new scheme
to apply Euro II standards to motorbikes,
60 percent of the 4,000 randomly tested
motorbikes in Hanoi and HCM City failed to
measure up even to standards lower than in
Taiwan and Thailand. The HCM City Depart-
ment of Natural Resources and Environment
reports that 80 percent of air pollution
citywide is caused by motorbike emissions.
However, Vietnam’s motorcycle manufac-
ture industry has been a magnet for foreign
investment and is now highly localised,
meaning parts are made in the country, rath-
er than imported and assembled. Local de-
mand has helped to fuel the growth of the
industry, which bolsters export capability.
In the first nine months of 2009, the export
value of motorbikes and parts and compo-
nents reached almost US $470 million.
Clearly, with the bad comes the good.
Cars: Slow and Steady
When it comes to car policy, Vietnam is
basically stuck between a rock and a hard
place. On the one hand, the country faces a
potential deepening of its trade deficits if it
cannot develop its automobile manufactur-
ing industry before 2018, when new ASEAN
commitments will disallow the high auto
import tariffs that have so far protected
local manufacturers. On the other hand,
infrastructure is incapable of supporting
more rapid growth, one reason why the
government has limited consumption by
imposing some of the highest auto taxes in
the world. Consequently, the automotive
manufacturing industry is the inverse of the
motorbike industry: relatively low domestic
consumption has handicapped the develop-
ment of high-quality parts and components
manufacture, which limits Vietnam's auto
export capability
The result has been significantly more
controlled growth than the motorbike mar-
ket has seen, with about 47,000 new cars
joining HCM City’s roads each year. And
while tax structure changes are notorious
in Vietnam, Michael Pease, general director
of Ford Vietnam and a TK-year veteran of
Southeast Asia’s automotive industry, says
Vietnam has followed the same path many
other developing nations have.
“The industry tends to start off with a
focus on trucks for commercial business ap-
plications as the country industrialises,” ex-
plains Pease. “Then as the market develops,
and as society and the economy matures,
you see the growth of business demand for
vehicles. And then you see the third stage of
development, which is private demand for
vehicles. We’re entering the third stage.”
It’s clear then why the Toyota Innova,
Ford Everest and other 7- and 9-seat multi-
purpose vehicles have been so popular in
recent years. Not only did the tax system
favour vehicles with greater seat capacity,
but MPVs were—and still are—used for
business purposes, specifically to bring prod-
ucts to Vietnam’s thousands of markets and
mom ‘n’ pop stores.
This April the government adjusted the
tax structure as Vietnam enters the third
stage. Luxury tax is no longer based on seat-
capacity but engine capacity, with the low-
est tax rate (45 percent) applied to vehicles
with 2.0-litre engines or smaller—typically
small cars. In September, year-to-date sales
of locally manufactured personal cars were
up 15 percent over the same period in 2008,
and MPV/SUV sales were down 11 percent.
While the MPV/SUV class has faired bet-
ter than Pease expected following the tax
hike from 50 to 60 percent on vehicles with
3.0-litre engines or larger, he says the future
lies elsewhere: “The interesting part of the
market is subcompacts, or what we call
B-cars. That’s really where I see the growth
coming in.”
This class includes the locally assembled
Chevrolet Spark and Toyota Vios and im-
ported models like the Kia Morning, Toyota
Yaris, Hyundai Getz and BMW.
Still, large or small, more cars mean
denser traffic, and HCM City needs to find
a solution.

The Road Forward
Since it is physically and financially impos-
sible to widen many of the city’s streets,
much of the infrastructure development has
focused on creating alternative routes that
allow commuters to avoid the dense city
centre.
The recently opened Phu My Bridge that
connects Districts 2 and 7, for example, is
actually an important part of the city’s sec-
ond ring road, one of four beltways that will
eventually encircle the city. While the bridge
is currently only open to cars and motor-
bikes, it’s purpose is to divert truck traffic
away from the inner districts and provide a
direct connection to the Hanoi Highway.
The East-West Highway, also completed
in September, allows commuters to travel
along the outskirts of Districts 1, 4, 6 and 8
and Binh Tan. When the Thu Thiem Tunnel
is completed (scheduled for the end of next
year), the highway will connect National
Road 1A in western Binh Chanh District with
the Hanoi Highway in District 2.
The highway was financed by the Japan
International Cooperation Agency (JICA),
which is also funding part of the first urban
metro line, the North-South Expressway to
Dong Nay and a number of other Official
Development Assistance (ODA) projects in
Vietnam. While banks like JICA bring consid-
erable resources to bear, they’re not immune
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to the complications of financing large-scale
projects in the developing world.
“What is very common in many other
countries also is that you have the plan, you
have so many projects in the master plan,
but there’s no money to implement it,” says
JICA’s HCM City liaison, Anzo Hiroshi. “The
problem we have at the moment is the price
escalation of those existing projects. The
original construction cost is not enough.”
Still, some worry that if enough attention
isn’t paid to the city centre, HCM City could
fall prey to a prevailing urban trend: sprawl.
“It seems like a lot of the planning atten-
tion is going on outside of the city, looking
at satellite towns,” says architect and Green-
Consult Asia founder Melissa Merryweather.
“And probably the rich people who have
access to private transportation are going
to be moving out because it’s going to be
healthier, less polluted—their kids might
actually be able to play in green spaces.
“If that happens, we’re seeing a classic
suburban situation like what happened in
a lot of American cities. But that happened
in the 50s and 60s and early 70s and now
people are coming back to the city to re-
inhabit the city centres. And really, the city
centre is the green solution. You want to
densify your cities. You want to layer your
cities up so that they’re attractive options.”
Parking
Although more car-owners are driving
themselves, many private vehicles, especially
luxury models, are still chauffer-driven. As
a result, thousands of cars on the road may
simply be killing time.
“With no parking lots, it means that the
cars just drive around,” says Merryweather.
“People mobile phone their driver, and their
driver comes and picks them up. So they
just casually park on the roads or just drive
around. That’s not helping the situation.”
The city’s strategy is to create under-
ground parking, but few structures except
hotels have the footprint to accommodate
it. Plans began in 2004 to create munici-
pal parking structures, but they’ve been
plagued with delays. Six of the eight District
1 projects have been scrapped, largely
due to their anticipated effect on nearby
structures or poor planning that failed to
take into account plans for the future metro
system.
Just last month, the city approved plans
for the first large-scale underground car
park beneath Le Van Tam Park in District
1. In addition to three floors of retail, five
floors encompassing 72,321 square metres
are projected to accommodate more than
2,000 motorbikes, about 1,200 cars and 28
buses and trucks. Builders estimate it will
take about two years to complete, but the
project is already six years in the making.
The only other parking structure under
construction is one at Chi Lang Park on
Dong Khoi between Le Thanh Ton and Ly
Tu Trong, which will mostly serve surround-
ing trade centres and hotels. That leaves
Ben Thanh Market and the lot in Lam Son
Square.
 Public Transportation
In 2004, public buses seemed to be the
city’s best hope. Public transport develop-
ment plans projected that buses and taxis
would satisfy 35 percent of transport needs
by 2010, and tens of millions of dollars in
subsidies were pumped into the system in
the following years. By 2008, the goal was
lowered to 10 to 12 percent, with buses ex-
pected to meet 8 to 10 percent of the total.
Now, the proposed metro system, sched-
uled for completion in 2020, has become
the next great hope. Originally devised as
a four-line system, another three lines have
since been suggested.
At present, only Line 1 has entered the
pre-construction phase. The future train will
run underground for 2.2 km, starting at Ben
Thanh Market, stopping at the Opera House
and connecting to a station near Le Thanh
Ton. Afterwards, it will travel above ground
for 17.1 km from Binh Thanh along Dien
Bien Phu, make stops in District 2, Thu Duc
and District 9 and terminate at Suoi Tien
Theme Park.
Other lines are in varying states of prog-
ress. Last month, the government approved
the plans for Line 2, which will run from Ben
Thanh Market under Cach Mang Tang Tam
to western Tan Binh District. Studies have
been completed on Line 3a, which will run
from Ben Thanh through District 5 to Mien
Tay Bus Station in District 11. In April, the
Spanish Government committed to funding
feasibility studies for lines 5 and 6. Line
5 is set to run from the Saigon Bridge to
Districts 8 and 10 via Binh Thanh and Phu
Nhuan Districts, while Line 6 would run in
District 11 and connect Lines 2 and 3a.
While the first line is scheduled to go
online in 2014 and carry more than 500,000
commuters daily, it faces considerable logis-
tic challenges.
“The concern is really the utility location:
water pipes, electricity, telephone,” say
Anzo Hiroshi. “If you have the drawings in
Tokyo or in New York, you can see what is
underground—what kind of cables, what
kind of pipes. But in Vietnam—impossible.
You have certain drawings, but when you
dig it, it’s totally different.”
Another challenge will be integrating the
system. Designs call for parking areas at ter-
minals, but planners need to interlink each
station in the system with bus routes and
improve the conditions on sidewalks, which
are currently packed with motorbike park-
ing. The city’s taxi fleet—currently about
7,000 vehicles strong, not counting about
1,000 illegal taxis—will also be integral.
“In order for HCM City to absorb all the
many travellers, they have to have all of
those matrixes really working well,” says
Merryweather. “Otherwise people are going
to continue to flood into the city in bikes
and cars.”
In a perfect world, all of these projects
would coalesce. Parking structures would be
ready to accommodate the inevitable spike
in car ownership post-2018. The bus system
would come up to speed just before the
entire metro system goes online two years
later, right on time. Motorbike ownership
would peak soon after, and the whole city
would breathe a collective sigh of relief. In
reality, things are unlikely to go so smoothly,
but still, like a xe om driver napping in the
afternoon, we can dream.
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