The decree, signed by Prime Minister Nguyen Xuan Phuc on Sunday, which determines the registration fee for cars produced in Vietnam, would be in effect until December 31.

First-time registration fees for locally made cars, trailers and semi-trailers towed by cars, among others, would be cut by half. From January 1, 2021, the fee will be back to the old level.

Registration fees were previously 12 percent of the car price in localities like Hanoi, Hai Phong City and Quang Ninh Province, 10 percent in Ho Chi Minh City and 11 percent in the central province of Ha Tinh, for instance.

The move is part of an effort to boost car sales, which plummeted in the first five months of this year due to the impact of the Covid-19 pandemic, and auto brands might consider lowering prices of imported cars to compete, analysts said.

Auto sales fell 34 percent year-on-year in the period to 79,396 units, according to the Vietnam Automobile Manufacturers Association. Major car makers like Toyota, Ford and Honda closed their factories and dealerships for two weeks in April due to the Covid-19 pandemic.

Last year car sales had risen 11.7 percent against 2018 to 322,322 units.