VietNamNet Bridge - If Russia and Belarus focus on making low-cost trucks, they will find firm positions in the Vietnamese market.

 

The inter-ministerial task force in charge of negotiating the agreement between Vietnam and Russia & Belarus on the cooperation in automobile manufacturing and assembling in Vietnam has announced that the negotiation has been completed.

The negotiation delegations’ heads have initiated protocols which are expected to be officially signed in late February or early March.

Under the agreement, Russian automobile manufacturers (KAMAZ, GAS, UAZ) and Belarusian (MAZ) will cooperate with Vietnamese partners to set up some joint ventures that make trucks, UTV cars and specialized vehicles with KAMAZ, GAZ, UAZ and MAZ brands.

The joint ventures with Russia are expected to have localization ratios of 25 percent by 2020 for specialized vehicles, 30 percent for trucks & UTV vehicles and 35 percent for the cars with 10 and more seats. The localization ratios would be 45 percent of trucks and cars with 10 and more seats by 2025. 

Meanwhile, Belarus committed higher localization ratios of 40 percent by 2020 and 60 percent by 2026.

The information has raised the hope that Russia and Belarus can help Vietnam fulfill its automobile dream. 

Vietnam has been cherishing the hope for the last two decades while licensing a lot of foreign automobile manufacturers to set up their production bases in Vietnam. 

However, the foreign invested automobile manufacturers from Japan, Europe and US only have cars assembled in Vietnam with very low locally made content percentage.

Nguyen Khac Trai, a lecturer of the Hanoi University of Technology, when asked to comment about the cooperation with Russia and Belarus, said the localization story will depend on the consistency of the state’s policies and the interest of Vietnamese enterprises.

The inter-ministerial task force in charge of negotiating the agreement between Vietnam and Russia & Belarus on the cooperation in automobile manufacturing and assembling in Vietnam has announced that the negotiation has been completed.

Trai said Vietnam failed to implement the program on developing the automobile industry in the last two decades because policies were inconsistent and Vietnamese businesses were incapable. 

Therefore, if the two problems can be settled, Vietnam will be able to develop an automobile industry of its own.

Trai thinks it is highly possible that Vietnam can increase the localization ratio in automobiles with Russian and Belarusian support, especially in developing trucks. 

It would be more difficult to do this with sedan because of the very high international standards. Besides, sedans to be made by the joint ventures are uncompetitive with products made by the manufacturers from Japan, the US and Europe.

He also believes that the products made by the Vietnam-Russia and Vietnam-Belarus joint ventures will be more competitive than Chinese products.

“Vietnam has been importing trucks in large quantity from China, but Chinese products don’t have high quality,” he explained.

Dat Viet