return icon Vietnamnet.vn

Dreaming big, investors pour trillions of dong into automobile factories

The Vietnamese automobile market is full of potential with predicted sales of up to 1.8 million products a year, but it still remains risky to invest in the industry.

Big investment

Thanh Cong Group and Hyundai Motor organized a groundbreaking ceremony to kick off the construction of a new factory in Ninh Binh.

 

 

{keywords}

 

 

The factory, capitalized at VND3.2 trillion, covers an area of 50 hectares in Gian Khau IZ and has designed capacity of 100,000 products a year. It will use modern technologies and put out models meeting Euro 5 and Euro 6 emission standards.

Thanh Cong has also started a project on an automobile supporting industry complex in Quang Ninh. Its CEO Le Ngoc Duc said the complex will gather many enterprises that make automobile parts, especially high-tech content for domestic automobile production and export.

Ford Vietnam has completed the upgrading and expansion of its factory in Hai Duong which has the capacity of 40,000 products a year, with investment capital of VND1.9 trillion.

In late 2019, Thaco made an investment to raise the capacity of Kia manufacturing factory from 20,000 to 50,000 cars a year. Prior to that, in early 2018, Thaco opened the Mazda manufacturing factory (50,000 products a year in the first phase).

In Chu Lai Open EZ in Quang Nam, Truong Hai has 12 car part manufacturing factories, with products for domestic consumption and export.

In mid-2019, VIngroup completed the first phase of VinFast automobile factory in Hai Phong, which can put out 250,000 products a year.

Analysts say that enterprises have been making big investments in automobile projects because they see the market has great potential.

The Ministry of Industry and Trade (MOIT) predicted that 750,000-800,000 products could be sold a year by 2025 and the figure would be 1.7-1.85 million by 2035.

Risks

Though the market has high potential, because of rapidly developing middle class, automobile manufacturers are facing big challenges.

More and more imports are arriving in Vietnam thanks to the import tariff of zero percent and simpler procedures. Because of high production costs, domestically made products are less competitive than imports in price.

Toyota Vietnam has resumed the assembly of its Fortuner model in Vietnam, but sales are unsatisfactory. Meanwhile, VinFast said it has incurred the loss of millions of dong for every car sold, and reported a loss of VND6.6 trillion in H1.

The government has committed to promote the development of the automobile industry with new policies, and automobile manufacturers are still waiting.

In the latest news, the government has asked the Ministry of FInance (MOF) to amend the luxury tax policy and submit the draft policy to the National Assembly in October. 

Tran Thuy

Manufacturing automobiles is a costly game

Manufacturing automobiles is a costly game

Automobile manufacturers usually incur a loss for the first 5-10 years of operation, but some of them have had to give up the game because they could not afford the high costs.

Local automobile manufacturers look forward to big preferences

Local automobile manufacturers look forward to big preferences

What should automobile manufacturers do – import cars for domestic sale or assemble cars domestically? They prefer the second solution, though the first brings higher profit.

MORE NEWS

Unemployment rate falls, workers' incomes increase

According to the General Statistics Office's Report, the labor and employment situation in the third quarter of 2022 continued to recover.

The most expensive birds in Vietnam

Red-whiskered bulbs (Pycnonotus jocosus) with original colors are priced at VND500 million and tiny chickens with original colors sell for thousands of USD.

Drinks from dracontomelon: A popular heat-relieving drink in Hanoi

Sweet drinks made from ‘sau’, a fruit which is known scientifically as Dracontomelon, are a popular heat-relieving drink in Hanoi during the hot summer.

1,000 authors with doctoral degree or higher compiled textbooks for new academic year

As many as 1,574 authorities participated in compiling textbooks for six grades in accordance with the new general education program issued in 2018.

Expectations positive for growth trajectory

The Vietnamese economy has been gradually bouncing back thanks to the government’s major efforts to curb the pandemic and remove obstructions to progress for enterprises.

Law on Pharmacy needs to be amended

The lack of medicine at public hospitals has caused concern among the public. The Prime Minister has instructed the Ministry of Finance (MOF) and relevant ministries to find solutions to resolve the problem.

FIEs seek streamlined workforce policy

The human resources of Vietnam are improving to meet the demand of foreign-invested enterprises. However, they may require stronger policies on visas to enhance performance and transfer high technologies to Vietnam

US investors display confidence in Vietnam

Vietnam and the United States are seeking ways to increase their investment and trade ties, with the latter pledging to support the latter in education, training, and the energy transition.

Entrepreneurs blaze a trail in the city

Die-hard entrepreneurs are re-inventing themselves to solve business problems and find their niches in Ho Chi Minh City.

VN ranks 48th in Global Innovation Index 2022

Vietnam ranked 48th among the 132 economies featured in the Global Innovation Index 2022 (GII 2022).

Outstanding policies take effect in October 2022

A string of new policies on higher vehicle registration fee, termination of compulsory unemployment insurance premium, electronic identification and authentication and cybersecurity come into effect in October 2022.

Vietnam issues new regulations on storing data in cyberspace businesses

The data must be stored for at least 24 months, and system logs for criminal investigation purposes must be stored for at least 12 months.

12 sailors dead from suspected food poisoning on Chinese vessel, nine more hospitalised

Nine more critical ill sailors were saved after being taken to hospital in the southern province of Ba Ria-Vung Tau.

Tran Van Thao becomes first Vietnamese IBA champion

Tran Van Thao won the International Boxing Association (IBA) belt after overcoming Andrew Laurio of the Philippines, marking a significant milestone in his career and Vietnamese boxing as a whole by becoming the nation’s first IBA champion.

Users of Vietnamese digital platform surge 23.5% in August

Vietnamese’s use of domestic digital platforms recorded a year-on-year rise of 23.5% in August, with 494 million users.
back_to_top