Vietnam to spend $4.3 billion to develop automobile industry

Experts think the plan to spend $4.3 billion to develop the automobile industry will be in vain.

The Ministry of Industry and Trade (MOIT) is drafting a plan on developing the automobile industry which will be submitted to the government later this year. It is designing a credit package worth $4.3 billion to develop automobile supporting industries.

Vietnam to spend $4.3 billion to develop automobile industry



The plan

According to the ministry, after years of development, Vietnam is still only making simple car parts and components with low- and average technology.

In mechanical engineering, enterprises undertake simple work such as stamping, cutting, welding and painting, while very few companies can do work with high technology content such as casting, heat treatment and surface machining. In electronics manufacturing, they can only make plastic and packaging items.

MOIT believes there should be a preferential credit package of VND100 trillion for the development of supporting industries.

MOIT believes there should be a preferential credit package of VND100 trillion for the development of supporting industries.

 

It is expected that Vietnam’s products in supporting industries would have high competitiveness, satisfying 45 percent of domestic needs by 2020.

The solutions put forward by MOIT include policies to promote the market for the downstream industry, focusing on the automotive, electronics, textile, footwear, and material industries; arranging investment capital to build three technical centers to support industrial development; providing support in credit and environment treatment; and removing tax problems.

There are 358 enterprises related to the automobile industry, including 50 assemblers, 45 enterprises making chassis and body work, and 214 making car parts. The figure is small compared with 385 enterprises in Malaysia and 2,500 in Thailand.

Faint hope

Experts believe the plan will consume too much money and bring few results.

“I cannot see any breakthrough in the new plan. The details of the plan are exactly the same as the plans MOIT put forward before. As you see, the plans have failed, " an expert said.

Meanwhile, the manager of an automobile assembling enterprise commented that the problem of the automobile industry doesn’t lie in credit.

The localization ratio in the motorbike manufacturing industry is high because of the large market. About 4 million motorbike products are sold each year.

As the market is large, more and more assemblers and vendors have arisen, and there is no need to set up preferential credit packages to develop supporting industries for motorbike manufacturing.

The automobile industry is different. Investors will not pour money into manufacturing projects because they will not make a profit with the modest output of several thousand products.

 Kim Chi

Vietnam’s automobile market to be flooded with zero-tariff ASEAN cars

Vietnam’s automobile market to be flooded with zero-tariff ASEAN cars

The car sales in Vietnam are forecast to reach 500,000 units per year in 2020 and 1 million per year by 2030, with a turnover of US$12 billion each year.  

Renowned automobile brands to join Vietnam Motor Show 2019

Renowned automobile brands to join Vietnam Motor Show 2019

The Vietnam Motor Show 2019 (VMS 2019) will be held at the Saigon Exhibition and Convention Centre from October 23-27.

 
 

Other News

.
Inconsistencies deter power plan feasibility
Inconsistencies deter power plan feasibility
BUSINESSicon  14/10/2021 

Power source development in recent years has been at odds with load distribution, and many coal-fired power plants expected to operate in the last five years are behind schedule.

Gigantic lifeline en route for essential businesses
Gigantic lifeline en route for essential businesses
BUSINESSicon  14/10/2021 

In a bid to help the country recover after the economy grew at a very low level in the third quarter, a huge financial support package is to be offered to enterprises whose performance is a backbone of economic growth.

Bank loans rise despite pandemic
Bank loans rise despite pandemic
BUSINESSicon  14/10/2021 

Despite being strongly affected by the COVID-19 pandemic, bank loans in the first nine months of this year kept rising compared to the same period last year, deputy governor of the State Bank of Vietnam (SBV) Dao Minh Tu said.

GDP growth target is hard to reach: Minister of Planning and Investment
GDP growth target is hard to reach: Minister of Planning and Investment
BUSINESSicon  14/10/2021 

Minister of Planning and Investment (MPI) Nguyen Chi Dung calculated economic growth in the whole of 2021 at between 3 and 3.5 per cent, but also said such a target will be difficult to reach.

Positive signs for year-end car shopping
Positive signs for year-end car shopping
BUSINESSicon  14/10/2021 

Car sales in Vietnam increased by 52 percent last month after five consecutive months of decline, showing positive signs for the car market at the end of the year.

WB lowers Vietnam’s GDP growth forecast to 2-2.5 percent this year
WB lowers Vietnam’s GDP growth forecast to 2-2.5 percent this year
BUSINESSicon  13/10/2021 

Vietnam’s GDP growth forecast for this year has been lowered to 2-2.5 percent, according to the World Bank's October 2021 Vietnam Macro Monitoring.

Vietnam’s rice price surges, surpasses that of Thailand
Vietnam’s rice price surges, surpasses that of Thailand
BUSINESSicon  13/10/2021 

The export price of Vietnam’s 5% broken rice has soared recently, surpassing that of Thailand and far outstripping the rice prices of India and Pakistan, according to the Vietnam Food Association.

Local authorities urged to set green corridor for domestic flights
Local authorities urged to set green corridor for domestic flights
FEATUREicon  13/10/2021 

The first commercial flights have been provided in the new normal period. However, the application of different regulations in different localities have caused problems.

Vietnamese capable of making high tech products
Vietnamese capable of making high tech products
FEATUREicon  14/10/2021 

Many Vietnamese enterprises are diligently researching and developing Make in Vietnam products with high technology content.

Commodity exports via e-commerce promoted during COVID-19 pandemic
Commodity exports via e-commerce promoted during COVID-19 pandemic
BUSINESSicon  13/10/2021 

Representatives from State management bodies and companies speak about the advantages and challenges Vietnamese businesses face in e-commerce, especially commodity exports.

VIETNAM BUSINESS NEWS OCTOBER 13
VIETNAM BUSINESS NEWS OCTOBER 13
BUSINESSicon  13/10/2021 

Vietnam grasps opportunities to expand agricultural export market

Vietnam to further develop biotechnology industry by 2030
Vietnam to further develop biotechnology industry by 2030
BUSINESSicon  14/10/2021 

The Government has approved a plan to further develop the biotechnology industry in Vietnam, levelling it up to that of advanced industrial countries by 2030. 

Tax cut proposed to stabilise domestic petrol price
Tax cut proposed to stabilise domestic petrol price
BUSINESSicon  13/10/2021 

Calls have been made for tax cuts to stabilise domestic fuel prices as global oil prices see continual increases.

PM says Gov't to stand with businesses during pandemic
PM says Gov't to stand with businesses during pandemic
BUSINESSicon  13/10/2021 

Prime Minister Pham Minh Chinh congratulated and sent his best regards to all Vietnamese entrepreneurs to mark Vietnam Entrepreneurs' Day (October 13) during a meeting in Hanoi yesterday. 

SOE equitisation slow this year due to COVID-19
SOE equitisation slow this year due to COVID-19
BUSINESSicon  13/10/2021 

The outbreak of COVID-19 in many localities has delayed the equitisation of State-owned enterprises (SOEs).

Unemployment, underemployment unprecedentedly high
Unemployment, underemployment unprecedentedly high
BUSINESSicon  13/10/2021 

The number of employed people in Q3/2021 fell sharply compared to the previous quarter and the same period of last year, while unemployment and underemployment rates increased to an all-time high.

Intel, Samsung eye fully running HCM City plants in late November
Intel, Samsung eye fully running HCM City plants in late November
BUSINESSicon  12/10/2021 

Intel Corp. and Samsung Electronics Co. are both aiming to resume full operations of their HCM City plants by the end of November.

FDI inflow into Vietnam still on upturn trend
FDI inflow into Vietnam still on upturn trend
BUSINESSicon  12/10/2021 

Despite impacts of the COVID-19 pandemic, the inflow of foreign direct investment (FDI) into Vietnam still rose 4.4 percent year on year in the first nine months of 2021 to 22.15 billion USD.

To have free trade zone, Hai Phong needs special mechanism
To have free trade zone, Hai Phong needs special mechanism
BUSINESSicon  12/10/2021 

Some National Assembly Deputies expressed their concerns about the establishment of a free trade zone (FTZ) in Hai Phong at a National Assembly Standing Committee session on October 11.

In new normal, businesses are afraid of ‘sub-licenses’
In new normal, businesses are afraid of ‘sub-licenses’
FEATUREicon  13/10/2021 

Most enterprises can now resume usual operations as Vietnam has entered the new normal period. However, their production and business have been obstructed by ‘sub-licenses’, or new regulations set by agencies.

 
 
 
Leave your comment on an article

OR QUICK LOGIN