return icon

The last chance for Vietnam’s automobile industry

The Ministry of Planning and Investment (MPI) is compiling a plan to develop the automobile industry in the post-Covid-19 period with many new solutions.

After Bui Ngoc Huyen failed with his ‘made-in-Vietnam cars’ dream, most people thought that no investor would dare pour money into automobile manufacturing projects.




Vinaxuki's workshops have been left idle



Huyen’s Vinaxuki, with total investment capital of VND1.65 trillion, had to stop operation seven years ago.

Its factory had become dilapidated and equipment had broken down. Commercial banks, or VInaxuki’s creditors, have tried to sell the factory to collect debts, but they still cannot find buyers.

Some investors have shown their intention to buy Vinaxuki’s assets put up for liquidation, but just as scrap.

However, they have changed their mind after seeing cars with Vinfast brand rolling on the streets. The initial success of Vinfast, a 100 percent Vietnamese automobile brand, has rekindled a new hope for Vietnam’s automobile industry.

Over many years, the Ministry of Industry and Trade (MOIT) has had many strategies to develop automobile industry. However, they have brought very modest outcomes.

MPI has recently set to work on a new plan for the automobile industry in the new period when Covid-19 is contained.

The major idea is to take full advantage of the wave of foreign investors relocating production bases out of China after the pandemic, in order to develop supporting industries and develop an ecosystem for the automobile industry.

MPI, like MOIT, reported that Vietnam only does simple assembling with production lines focusing on four stages – yielding, painting, assembling and testing. Meanwhile, the car prices in Vietnam are much more expensive than in other countries.

In Vietnam, car buying is expected to grow rapidly when GDP per capita exceeds $3,000 and the number of cars per 1,000 people reaches 50.

MPI pointed out that the Vietnamese car market is still the smallest among the five countries in ASEAN that have an automobile industry. It is just one-third of the Thai market and one-fourth of Indonesia.

The GDP per capita is not high enough for the majority of people to own cars and to encourage the domestic automobile industry to develop.

The major components of the automobile ecosystem are as follows: the domestic output needs to reach 1 million products a year at least; the domestic market size (number of new cars) needs to be 900,000 products a year, or 50 cars per 1,000 people; there should be at least 1,000 car part vendors; and there should be 0.045 kilometers of highway per 1,000 people.

ASEAN is becoming one of the world’s largest automobile production and consumption areas with five countries manufacturing and assembling cars, namely Thailand, Malaysia, Indonesia, the Philippines and Vietnam.


The Ministry of Planning and Investment (MPI) is compiling a plan to develop the automobile industry in the post-Covid-19 period with many new solutions.


ASEAN 4 countries have developed their automobile industry for 30-40 years, especially since the mid-1980s, which witnessed a wave of Japanese investors making outward investments in the region.

Vietnam’s automobile industry has been developing for 10 years.

Indonesia and Thailand are the two attractive destinations for large automobile manufacturers in the world. In the context of investment flow after Covid-19, the two countries will be rivals to Vietnam.

Meanwhile, Myanmar, Laos and Cambodia have taken first steps to develop their automobile industry. This means that competition among regional countries will be increasingly fierce.

The last chance

To develop the automobile ecosystem, according to MPI, Vietnam needs to develop an infrastructure system which can satisfy people’s needs to use cars, especially in Hanoi and HCM City.

The ministry pointed out that there must be reasonable measures to ensure the transparent and healthy development of the domestic automobile market through technical barriers, measures to prevent trade fraud, and trade remedies.

In addition, it is necessary to strictly control imports to protect the market, automobile brands and consumers’ long-term benefits.

The viewpoint of MPI is that Vietnam should focus on supporting automobile manufacturers which have large output, the enterprises that make certain types of automobiles and have capacity of over 50,000 products a year, and projects on making engines, gear boxes and transmissions.

MPI also mentioned a solution which was put forward by MOIT a long time ago but has not been implemented – supporting automobile manufacturers to lower production costs and improving competitiveness by applying specific luxury tax rates on products with high locally made content ratios (not imposing luxury tax on the value created in Vietnam).

The solution may raise concerns about the violation of international commitments, though it is being applied by ASEAN countries. However, this is the most effective solution to improve the competitiveness of domestically assembled products and encourage manufacturers to increase localization ratios.

According to MPI, some foreign investors have expressed interest in the development of Vietnam’s automobile industry.

“If missing out the last chance, Vietnam will become a car import market in the future,” MPI said. 

Tran Thuy

Gov’t support aids automobile industry

Gov’t support aids automobile industry

The domestic automobile industry was forecast to thrive, given the Government’s supports in tax policies for imported automobile components coupled with the increasing income of citizens.

Dreaming big, investors pour trillions of dong into automobile factories

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.


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.


Prime Minister chairs teleconference to review Jan-Sept socio-economic performance


Much room for sustainable growth of industrial real estate

Vietnam looks to upgrade int'l merchant fleet

Vietnam’s maritime sector is striving to upgrade its international merchant fleet in order to reduce the country’s dependency on foreign-owned vessels in export-import activities.