The way we drive now and a lookat the plans and problems that lieahead. By Tom DiChristopher.

It's just an average morning on Ton DucThang Street. A line o lorries is backed uprom the intersection at Le Thanh Ton toNguyen Hue, and taxis are parked alongthe river, leaving cars, motorbikes and yetmore taxis to jockey or space in the re-maining lanes. Up the road, there’s a groupo school kids on bicycles wobbling away,three abreast; urther, a three-wheeledcart is eeding the bottleneck.According to the Committee orTrac and Saety, more than 3.8 millionmotorbikes and 383,000 private cars sharethe streets with trucks and buses in HCMCity. On top o that, about one millionmotorbikes and 60,000 cars commute intothe city every day. And in the immediateyears to come, all signs say the streets are just getting more crowded.The city has reacted to the increasingcongestion, at times dispensing policeto problem areas and cracking down onillegal parking, but in the long term, bigpicture solutions are necessary, both toprevent trac jams rom worsening and toalleviate the city’s smog-choked skies. Suchinitiatives are under way, but in order towork, they need to take stock o the pres-ent and learn rom the past.

When it comes to car policy, Vietnam isbasically stuck between a rock and a hardplace. On the one hand, the country aces apotential deepening o its trade decits i itcannot develop its automobile manuactur-ing industry beore 2018, when new ASEANcommitments will disallow the high autoimport taris that have so ar protectedlocal manuacturers. On the other hand,inrastructure is incapable o supportingmore rapid growth, one reason why thegovernment has limited consumption byimposing some o the highest auto taxes inthe world. Consequently, the automotivemanuacturing industry is the inverse o themotorbike industry: relatively low domesticconsumption has handicapped the develop-ment o high-quality parts and componentsmanuacture, which limits Vietnam's autoexport capabilityThe result has been signicantly morecontrolled growth than the motorbike mar-ket has seen, with about 47,000 new cars joining HCM City’s roads each year. Andwhile tax structure changes are notoriousin Vietnam, Michael Pease, general directoro Ford Vietnam and a TK-year veteran oSoutheast Asia’s automotive industry, saysVietnam has ollowed the same path manyother developing nations have.“The industry tends to start o with aocus on trucks or 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 o business demand orvehicles. And then you see the third stage odevelopment, which is private demand orvehicles. 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 inrecent years. Not only did the tax systemavour vehicles with greater seat capacity,but MPVs were—and still are—used orbusiness purposes, specically to bring prod-ucts to Vietnam’s thousands o markets andmom ‘n’ pop stores.This April the government adjusted thetax structure as Vietnam enters the thirdstage. Luxury tax is no longer based on seat-capacity but engine capacity, with the low-est tax rate (45 percent) applied to vehicleswith 2.0-litre engines or smaller—typicallysmall cars. In September, year-to-date saleso locally manuactured personal cars wereup 15 percent over the same period in 2008,and MPV/SUV sales were down 11 percent.While the MPV/SUV class has aired bet-ter than Pease expected ollowing the taxhike rom 50 to 60 percent on vehicles with3.0-litre engines or larger, he says the uturelies elsewhere: “The interesting part o themarket is subcompacts, or what we callB-cars. That’s really where I see the growthcoming in.”This class includes the locally assembledChevrolet Spark and Toyota Vios and im-ported models like the Kia Morning, ToyotaYaris, Hyundai Getz and BMW.Still, large or small, more cars meandenser trac, and HCM City needs to nda solution.It’s easy to blame the increasing numbero cars on the roads or HCM City’s tracwoes, but while their size is problematic onthe city’s small streets, currently it’s mo-torbikes that are fooding the city at wildlyunsustainable levels.Every day, the city registers about 1,000new motorbikes. Demand is such that salesor popular models like the Honda Air Bladeare remaining steady even though they’renow selling or about ve million VND abovethe manuacturers suggested retail price. I abuyer can’t aord that, imitation motorbikescan be had or about six to nine million VND.So ar, measures to limit motorbikegrowth have allen fat. When the govern-ment began denying registration in certainparts o the city last year, people just regis-tered them elsewhere under amily names.At times, it seems like the only option is tomake it too expensive or onerous to drive amotorbike; policy proposals have includedbanning imports, raising gas prices and limit-ing motorbike parking.Motorbikes are also at the root o thecity’s air quality crisis. While most cars meetEuro II standards throughout Vietnam,motorbike emissions policy is just emerging.In a pre-proposal study or a new schemeto apply Euro II standards to motorbikes,60 percent o the 4,000 randomly testedmotorbikes in Hanoi and HCM City ailed tomeasure up even to standards lower than inTaiwan and Thailand. The HCM City Depart-ment o Natural Resources and Environmentreports that 80 percent o air pollutioncitywide is caused by motorbike emissions.However, Vietnam’s motorcycle manuac-ture industry has been a magnet or oreigninvestment and is now highly localised,meaning parts are made in the country, rath-er than imported and assembled. Local de-mand has helped to uel the growth o theindustry, which bolsters export capability.In the rst nine months o 2009, the exportvalue o motorbikes and parts and compo-nents reached almost US $470 million.Clearly, with the bad comes the good.

Cars: Slow and SteadyMotorbike Mania

Although more car-owners are drivingthemselves, many private vehicles, especiallyluxury models, are still chauer-driven. Asa result, thousands o cars on the road maysimply be killing time.“With no parking lots, it means that thecars just drive around,” says Merryweather.“People mobile phone their driver, and theirdriver comes and picks them up. So they just casually park on the roads or just drivearound. That’s not helping the situation.”The city’s strategy is to create under-ground parking, but ew structures excepthotels have the ootprint to accommodateit. Plans began in 2004 to create munici-pal parking structures, but they’ve beenplagued with delays. Six o the eight District1 projects have been scrapped, largelydue to their anticipated eect on nearbystructures or poor planning that ailed totake into account plans or the uture metrosystem.Just last month, the city approved plansor the rst large-scale underground carpark beneath Le Van Tam Park in District1. In addition to three foors o retail, vefoors encompassing 72,321 square metresare projected to accommodate more than2,000 motorbikes, about 1,200 cars and 28buses and trucks. Builders estimate it willtake about two years to complete, but theproject is already six years in the making.The only other parking structure underconstruction is one at Chi Lang Park onDong Khoi between Le Thanh Ton and LyTu Trong, which will mostly serve surround-ing trade centres and hotels. That leavesBen Thanh Market and the lot in Lam SonSquare.Since it is physically and nancially impos-sible to widen many o the city’s streets,much o the inrastructure development hasocused on creating alternative routes thatallow commuters to avoid the dense citycentre.The recently opened Phu My Bridge thatconnects Districts 2 and 7, or example, isactually an important part o the city’s sec-ond ring road, one o our beltways that willeventually encircle the city. While the bridgeis currently only open to cars and motor-bikes, it’s purpose is to divert truck tracaway rom the inner districts and provide adirect connection to the Hanoi Highway.The East-West Highway, also completedin September, allows commuters to travelalong the outskirts o Districts 1, 4, 6 and 8and Binh Tan. When the Thu Thiem Tunnelis completed (scheduled or the end o nextyear), the highway will connect NationalRoad 1A in western Binh Chanh District withthe Hanoi Highway in District 2.The highway was nanced by the JapanInternational Cooperation Agency (JICA),which is also unding part o the rst urbanmetro line, the North-South Expressway toDong Nay and a number o other OcialDevelopment Assistance (ODA) projects inVietnam. While banks like JICA bring consid-erable resources to bear, they’re not immuneto the complications o nancing large-scaleprojects in the developing world.“What is very common in many othercountries also is that you have the plan, youhave so many projects in the master plan,but there’s no money to implement it,” saysJICA’s HCM City liaison, Anzo Hiroshi. “Theproblem we have at the moment is the priceescalation o those existing projects. Theoriginal construction cost is not enough.”Still, some worry that i enough attentionisn’t paid to the city centre, HCM City couldall prey to a prevailing urban trend: sprawl.“It seems like a lot o the planning atten-tion is going on outside o the city, lookingat satellite towns,” says architect and Green-Consult Asia ounder Melissa Merryweather.“And probably the rich people who haveaccess to private transportation are goingto be moving out because it’s going to behealthier, less polluted—their kids mightactually be able to play in green spaces.“I that happens, we’re seeing a classicsuburban situation like what happened ina lot o American cities. But that happenedin the 50s and 60s and early 70s and nowpeople are coming back to the city to re-inhabit the city centres. And really, the citycentre is the green solution. You want todensiy your cities. You want to layer yourcities up so that they’re attractive options.”