return icon

Vietnam struggles to fulfill dream of building an auto industry

Instead of reducing taxes and fees, the State needs to set reasonable policies to develop automobile supporting industries, experts say.

Reports to the government from the Ministry of Industry and Trade (MOIT) show that the automobile industry has made nearly no progress over tens of years. The amount of locally made content is still much lower than the expected level and lower than that in other regional countries.




MOIT, in a recent document to the government, asked to reduce the vehicle registration tax and luxury tax by 50 percent for domestically manufactured cars. The Ministry of Finance (MOF) has rejected the proposal, saying this will violate the WTO rules on non-discriminatory treatment.

MOIT’s proposal was not applauded by experts, who pointed out that the proposal and other preferences for automobile enterprises will only bring benefits to foreign manufacturers, not the domestic automobile industry.

Meanwhile, foreign invested automobile manufacturers keep complaining about the difficulties they meet in the Vietnamese market.

In its latest document to the Ministry of Planning and Investment, Honda Vietnam said that because of Covid-19, the manufacturer found it difficult to restore production as planned, and that Honda Vietnam may shift from manufacturing to importing cars for domestic sale.

For smartphones, chips are the ‘soul’ which determine the smartness of products. As for automobiles, the ‘soul’ components are the engine and powertrain, not plastic components or tires.

Nguyen Khac Trai, a former lecturer at the Hanoi University of Science and Technology, commented that if Vietnam gives many incentives, this would only benefit FIEs, and this is not the key to automobile industry development.

The key lies in the development of supporting industries. The supporting industries here are understood as producing important components which are the ‘soul’ of products.

For smartphones, chips are the ‘soul’ which determine the smartness of products. As for automobiles, the ‘soul’ components are the engine and powertrain, not plastic components or tires.

Trai believes that the state should offer incentives to develop supporting industries that make important components of cars. Thus would reduce production costs and ease reliance on foreign component suppliers.

He said the parts of engine and powertrain system are made of special alloys which have special characteristics. Therefore, it is necessary to develop tier-3 and tier-4 supporting systems.

Trai said a car is assembled from the tier-1 supporting components (sets of components). The tier-2 supporting system serves the tier-1 system, i.e. makes the parts to create sets of components. The tier-3 supporting system is the metallurgy industry, which provides materials to tier-2 system.

Trai stressed that the government should not give huge incentives to many, but only selectively to some units that make key parts of the car.

Le Ha 


Vietnam's automobile market sees 62 percent surge after social distancing

Vietnam's automobile market sees 62 percent surge after social distancing

The sales of automobile surged 62 percent month-on-month in May following the end of social distancing measures, according to the Vietnam Automobile Manufacturers’ Association (VAMA).

Inconsistent policies burden VN automobile industry

Inconsistent policies burden VN automobile industry

Car sales dropped sharply by 40 percent in Q1 2020 as several industries cannot reach agreement on solutions to develop the automobile industry.


Carbon market to help achieve net zero emissions

Greenhouse gas emissions in Vietnam increased rapidly over the past three decades in direct proportion to the economy’s growth.


Buckwheat Flower Festival returns to Ha Giang in November

Vietnam welcomes 1.87 million foreign visitors in nine months

Vietnam welcomed about 1.87 million international arrivals in the first nine months of this year, 16.4 times higher than the same period last year but much lower than that in the same time in 2019 before COVID-19 broke out.

Close to 123,000 sea turtles released back to sea

The Con Dao National Park in the southern province of Ba Ria-Vung Tau released 122,867 baby turtles into the ocean between January and September.

Vietnamese, Danish friendship blossoms over the years

Many foreigners have enjoyed diverse landscapes, authentic local food, endless love, eternal friendship, and a favourable investment environment in Vietnam.

China imports less glutinous rice from Vietnam

The proportion of glutinous rice in total rice exports to China has fallen from 74 percent to 48 percent.

Vietnamese artists to appear in Norwegian play

Several talented local artists from the Vietnam Youth Theater have been invited to perform in 'Hedda Gabler', a classic play which is considered to be one of the outstanding works of Norwegian writer Henrik Ibsen.

Minor improvements seen in the transparency of provincial budgets

The average ranking of budget transparency for localities in 2021 was 69.53 points out of 100, a rise of just 0.44 points compared to 2020.

Pianist Nguyen Dang Quang returns home for concert of classical music

Piano player Nguyen Dang Quang, son of composer Quoc Trung and renowned artist Thanh Lam, is a fresh and promising presence at the event.

VN central bank acts to tighten the Vietnamese dong liquidity

A recent money market report of Saigon Securities Incorporation (SSI) showed the SBV last week net withdrew a total of VND34.6 trillion through the OMO channel.

Vietnam needs to improve human resources in digital age: World Bank

To reach the goal of becoming a high-income country by 2045, Vietnam needs to quickly improve the quality and quantity of its human resources.

Vietnam’s GDP rises by 13.67% in third quarter: statistics office

Vietnam’s gross domestic product (GDP) grew by 13.67% in the third quarter, according to the General Statistics Office (GSO).

Ministry of Culture demands strict supervision of beauty contests

Culture, Sports, and Tourism Minister Nguyen Van Hung has signed a directive strengthening state supervision of a variety of cultural and artistic activities, including beauty pageants and modelling contests.


Vietnam to become “new Asian tiger”: Italian journal

Vietnam to become the worlds chip production center

In the first eight months of this year, phones and electronic components have the most prominent export turnover in our country, reaching nearly 40 billion USD.