Vietnam needs a range of sound policies to develop the automobilesector in the face of fierce competition with foreign rivals as theimport tariff will slump to zero percent once the country joins theASEAN Free Trade Area by 2018.
Over the past 20 years, thesector has relied on simple techniques like welding, paint spraying andassembling with a low rate of local input materials.
Eighteen foreign-invested and 38 home firms are assembling around460,000 vehicles per year, including 200,000 cars, 215,000 trucks andother varieties, generating over 1 billion USD in tax revenue alone tothe State budget each year.
However, the average rate oflocally-made materials ranges between 7 and 10 percent, resulting inhigher manufacturing costs than others in the region.
Chairmanof the Vietnam Automobile Manufacturers’ Association and FordVietnam General Director Metelo Arias said the sector is hampered byever-changing policies and an underdeveloped support industry.
He pointed to the paradox that while Vietnam wants to build up amodern automobile industry, it issues a series of policies to limit theuse of personal vehicles. Particularly, a series of new tax and sparepart policies are discouraging investors.
For automakers,their business plan often lasts for at least five years. If the marketmoves uncertainly, it will become hard for them to go further.
Head of the Institute for Strategic Research under the Ministry ofIndustry and Trade Duong Dinh Giam described Thailand and Indonesia’s automobile industry policies as invaluable to other ASEAN membercountries, including Vietnam.
Giam said the two nations have outlined detailed and long-term goals on their road to becoming major Asian automakers.
Contemplating opportunities ahead, he said the Government stillpinpoints car manufacturing as a core industry with a focus to stimulateboth production and consumption.
Under the draft plan onVietnam’s automobile industry development until 2020, with a vision to2030, the country will produce automobiles with less than nine seats inhigh volume.
Giam further said that the Government haslessened car registration fees and corporate taxes, boding well for themarket. At the same time, automakers must do all they can to increasethe rate of their locally-made materials and competitive edge.
Arias shared view that Vietnam should issue support policies,including lower taxes as its manufacturing costs are 20 percent higherthan those of other countries in the region.
The year 2020 isforecast to start the booming use of cars with about 400,000 units eachyear, and around 2 million by 2030. Those with less than nine seats makeup some 70 percent of the total demand. If the domestic supply is yetto satisfy needs, the country must spend over 10 billion USD on annualimports.-VNA
Over the past 20 years, thesector has relied on simple techniques like welding, paint spraying andassembling with a low rate of local input materials.
Eighteen foreign-invested and 38 home firms are assembling around460,000 vehicles per year, including 200,000 cars, 215,000 trucks andother varieties, generating over 1 billion USD in tax revenue alone tothe State budget each year.
However, the average rate oflocally-made materials ranges between 7 and 10 percent, resulting inhigher manufacturing costs than others in the region.
Chairmanof the Vietnam Automobile Manufacturers’ Association and FordVietnam General Director Metelo Arias said the sector is hampered byever-changing policies and an underdeveloped support industry.
He pointed to the paradox that while Vietnam wants to build up amodern automobile industry, it issues a series of policies to limit theuse of personal vehicles. Particularly, a series of new tax and sparepart policies are discouraging investors.
For automakers,their business plan often lasts for at least five years. If the marketmoves uncertainly, it will become hard for them to go further.
Head of the Institute for Strategic Research under the Ministry ofIndustry and Trade Duong Dinh Giam described Thailand and Indonesia’s automobile industry policies as invaluable to other ASEAN membercountries, including Vietnam.
Giam said the two nations have outlined detailed and long-term goals on their road to becoming major Asian automakers.
Contemplating opportunities ahead, he said the Government stillpinpoints car manufacturing as a core industry with a focus to stimulateboth production and consumption.
Under the draft plan onVietnam’s automobile industry development until 2020, with a vision to2030, the country will produce automobiles with less than nine seats inhigh volume.
Giam further said that the Government haslessened car registration fees and corporate taxes, boding well for themarket. At the same time, automakers must do all they can to increasethe rate of their locally-made materials and competitive edge.
Arias shared view that Vietnam should issue support policies,including lower taxes as its manufacturing costs are 20 percent higherthan those of other countries in the region.
The year 2020 isforecast to start the booming use of cars with about 400,000 units eachyear, and around 2 million by 2030. Those with less than nine seats makeup some 70 percent of the total demand. If the domestic supply is yetto satisfy needs, the country must spend over 10 billion USD on annualimports.-VNA
