Belarussian car maker MAZ and Vietnamese partners will establish joint ventures to manufacture and assemble trucks and ten-seater cars in Vietnam.

The initiative is the result of an agreement between the governments of the two countries under which Belarus will assist Vietnam in the manufacturing of motor vehicles.

The protocol was signed by Vietnamese Minister of Industry and Trade Vu Huy Hoang and Belarusian Minister of Industry Vitali Mikhailovich Vovk, the Department of European Markets announced on March 24.

The Belarussian side pledged that automobiles manufactured by the joint ventures will have domestic content rates of 40% in 2020 and 60% in 2026. Their licences will be provoked if they fail to meet these set targets.

Aside from the Vietnamese market, the joint ventures will also make vehicles for export available to a third country, with countries in Southeast Asia as the first preference.

In order to achieve these targets, Vietnam will allow the joint ventures to import a number of completely assembled cars free of duties in order to further explore the market.

Vietnam will also grant duty-free import of components and accessories for a period of five years before the tax rate is eliminated under the Vietnam-Eurasian Economic Union (VN-EAEU) Free Trade Agreement.

The joint ventures must meet Vietnamese technical standards and the requirements detailed in the agreement on car manufacturing cooperation in order to be valid for the preferential tariffs.

The agreement is set to take effect in mid-2016 together with the VN-EAEU trade pact.

On March 21, Vietnam and Russia also inked an agreement on manufacturing motor vehicles in Vietnam.

Nhan Dan