return icon

Vietnamese automobile industry needs special policies to raise competition

Vietnam needs to issue special policies for the automobile industry to catch up with other countries in the ASEAN region, said experts at a conference held in Hanoi on Tuesday.





An automobile manufacturing line at Vietnamese automaker VinFast, a subsidiary of Vingroup. The company is expected to raise the localisation rate (local part supply) in Viet Nam. — Photo VinFast



Hosted by Central Institute for Economic Management (CIEM), experts discussed solutions to complete tax policies and financial support to boost the development of the industry of automobile and auto parts.

According to deputy head of CIEM Nguyen Thi Tue Anh, the production of automobile and auto parts is one of six key industries of Viet Nam.

She said it was needed to clarify the situation, inadequacies and limitations in the implementation of policies as well as proposing solutions while motivating businesses to develop.

Statistics from the Ministry of Industry and Trade shows the country’s automobile business has grown rapidly in recent years. The number of locally-assembled vehicles has annually risen 10 per cent in the period 2015-18, reaching 250,000 units in 2018.

Weak production is one of the reasons the industry failed to cope with the competition on tax cuts, which was eliminated for cars from ASEAN countries last year.

After nearly 20 years of development, there are only segments of passenger cars and trucks meeting local targets of localisation rate (local part supply) at 20 per cent and 45 per cent, respectively.

In term of car with less than nine seats, the localisation rate reached an average of 7-10 per cent, much lower than the set figure. The locally-produced products are simple such as tires, seats, mirrors and batteries. Meanwhile, the localisation rate of countries in the region has reached an average of 70 per cent, even 80 per cent in Thailand.

Nguyen Trung Hieu, Head of Policy Department under Vietnam Automobile Manufacturers Association (VAMA) that by the end of 2018, the country had 358 automobile-related manufacturing enterprises with 50 automobile assembling units, 45 enterprises producing chassis, bodies and trunks and 214 auto parts.

“This figure is much lower than other countries in the region such as Malaysia and Thailand,” he said.

Hieu added the domestic support industry enterprises have good capacity in some areas such as moulds, bicycle and motorbike components and standard mechanical components.

“The automobile industry is about 20 years behind countries in the region such as Thailand and Indonesia, so there should be special policies to encourage businesses to make breakthroughs,” Hieu said.

Nguyen Thi Hai Binh, an expert from the finance ministry’s Institute of Financial Strategy and Policy, said it is necessary to focus on studying and planning policies to encourage businesses.

Binh also proposed to exempt special consumption tax on domestically-produced goods, which are not imported from foreign countries, in addition to incentives relevant to land and credit to develop automobile manufacturing complexes in chain.

According to Deputy Chairman of Vietnam Association of Supporting Industries Truong Thi Chi Binh, it needed to give more credit incentives to help support industry firms raise competitiveness, like the fund for small and medium enterprises that has given priority to manufacturing and supporting industry firms. — VNS

Vietnam’s $20 billion automobile market at risk of decline

Vietnam’s $20 billion automobile market at risk of decline

If supporting industries cannot develop and automobile joint ventures continue importing car parts for assembly, Vietnam’s automobile industry will not survive after 2025, analysts say.

Automobile sales in Vietnam can set new record in 2019

Automobile sales in Vietnam can set new record in 2019

Vietnam's automobile market is expected to set a new sales record this year with sales of the Vietnam Automobile Manufacturer Association (VAMA) members and TC Motors averaging nearly 32,000 cars each month in January-September.  



Central localities likely to be hit by typhoon Noru

AI integration the inevitable path ahead

Big Data and AI will be the optimal tools to run factories in the future and digital transition will help firms optimise costs and cut emissions.

Ministry to scrutinise VietGap certifications after fake labels found on vegetables

The Ministry of Agriculture and Rural Development is investigating reports of vegetables sold in supermarkets being marked with fake Vietnamese Good Agricultural Practices (VietGap) labels.

E-commerce sector in dire need of qualified candidates

The tight supply of qualified candidates in the labour market is a glaring issue facing e-commerce firms, according to insiders.

Unique green moss-covered homes of the Tay Con Linh mountain range

It is an ideal environment for plants to flourish and thrive, including thick green moss, which ethnic people use to cover the palm-leaf roofs of their homes.

Farmers save wild birds and the environment

Farmers in different provinces throughout Việt Nam have for years spent time and effort to save wild birds, giving them a home to nest and lay eggs.

Deputy PM highlights significance of int'l solidarity, cooperation at UN session

The strengthening of international solidarity and cooperation is key to addressing interlocking global challenges, affirmed Permanent Deputy PM Pham Binh Minh while addressing the general debate of the 77th Session of the UN General Assembly.

Huge potential for luxury real estate in Vietnam

The branded residence market is gaining a stronger foothold in the Vietnamese market with potential to further develop, shaping the lifestyle of the country’s elite, according to experts.


Action plan to promote green growth in agriculture

Vietnam’s economic growth counts on high-tech FDI

Vietnam’s economic growth has been accelerating in 2022, with experts considering high-tech foreign investments as a driver.

The “seven-star” islands in Quang Ninh

Along with crystal blue sea and beaches, the 7 Sao (seven star) islands also have caves and primeval forests.

Customs you only see in Vietnam

The travel site Culture Trip has listed a number of Vietnamese customs that often surprise foreign tourists:

Investors and buyers play waiting game in credit switch

The State Bank of Vietnam finally created extra credit room for some banks on September 7. However, the extension is deemed low and may not help real estate businesses and homebuyers access feasible capital sources for their projects.

Woodwork exports to EU, US drop as consumers cut spending

Many woodwork manufacturers complain that exports have been sliding as people in target markets have been tightening their purse strings.

Vietnam: new destination for multinationals to set up R&D centers

Vietnam wants to upgrade foreign direct investment (FDI) quality by manufacturing products with higher hi-tech and added value, and multinationals are also striving to do this after many years in Vietnam.