Foreign investment is expected to increase in Vietnam’s automobileindustry in the coming years as the government explores measures toexpand the local market. Vietnam Investment Review reports.
“The Vietnamese government realised that there were barriers to thedevelopment of the automobile industry and is trying to remove themthrough a long-term master plan. The purpose is to develop an automobileindustry strong enough to compete with other countries in the region,”said Nguyen Thi Xuan Thuy, head of Strategy and Integration PolicyDivision under the Industrial Policy and Strategy Institute.
Thuy, who is also a member of the master plan’s drafting team, saidthe Vietnamese government wanted to attract more car foreign investorsinto the industry by reducing taxes and fees. Even though the masterplan has not yet been approved, it offers a bright outlook forcar-makers.
Kiyoshi Teshima, deputy director of VinaStar Motor – a subsidiary of Mitsubishi Motors in Vietnam, said hehoped the Vietnamese government would maintain stable policies for thecar industry. “Tax reductions are also indispensable to motivatecustomers to buy new cars,” said Teshima.
Over pastyears, the Vietnamese government has deliberately restricted the growthof the domestic car market because of chronically bad trafficinfrastructure. The policy includes high taxes and fees imposed on cars,meaning cars in Vietnam are three times more expensive than othermarkets.
Vietnam’s car ownership currently averages at 20 cars per 1,000 people, according to the Ministry of Industry and Trade.
“The difference about the new master plan is that the government willencourage the growth of the car market,” said Thuy, adding that a ratioof 50 cars per 1,000 people in the next ten years was being targeted.“Although the market is still small now, there will be hugeopportunities for car-makers once the new master plan is approved.”
Vietnam’s car industry began in the early 1990s when foreign carmakers like Toyota and Ford started building factories in the country.
Statistics from the Industrial Policy and StrategyInstitute showed that there were around 300 domestic and foreigncompanies operating in the car industry in Vietnam, with Toyota Vietnamas the biggest player, followed by local firm Truong Hai. However, allof them operate on a small scale and boast a localisation rate forcomponents of just 10 percent.
Jesus Metelo N. AriasJr, chairman of Vietnam Automobile Manufacturers’ Association, in aninterview last month with VIR said that the lack of clear and stablepolicies had hindered the development of the car industry in Vietnam.
Arias, also managing director of Ford Vietnam,stressed foreign car-makers and suppliers would continue to invest inVietnam but only if the government maintained a stable policy andreduced business costs.-VNA
“The Vietnamese government realised that there were barriers to thedevelopment of the automobile industry and is trying to remove themthrough a long-term master plan. The purpose is to develop an automobileindustry strong enough to compete with other countries in the region,”said Nguyen Thi Xuan Thuy, head of Strategy and Integration PolicyDivision under the Industrial Policy and Strategy Institute.
Thuy, who is also a member of the master plan’s drafting team, saidthe Vietnamese government wanted to attract more car foreign investorsinto the industry by reducing taxes and fees. Even though the masterplan has not yet been approved, it offers a bright outlook forcar-makers.
Kiyoshi Teshima, deputy director of VinaStar Motor – a subsidiary of Mitsubishi Motors in Vietnam, said hehoped the Vietnamese government would maintain stable policies for thecar industry. “Tax reductions are also indispensable to motivatecustomers to buy new cars,” said Teshima.
Over pastyears, the Vietnamese government has deliberately restricted the growthof the domestic car market because of chronically bad trafficinfrastructure. The policy includes high taxes and fees imposed on cars,meaning cars in Vietnam are three times more expensive than othermarkets.
Vietnam’s car ownership currently averages at 20 cars per 1,000 people, according to the Ministry of Industry and Trade.
“The difference about the new master plan is that the government willencourage the growth of the car market,” said Thuy, adding that a ratioof 50 cars per 1,000 people in the next ten years was being targeted.“Although the market is still small now, there will be hugeopportunities for car-makers once the new master plan is approved.”
Vietnam’s car industry began in the early 1990s when foreign carmakers like Toyota and Ford started building factories in the country.
Statistics from the Industrial Policy and StrategyInstitute showed that there were around 300 domestic and foreigncompanies operating in the car industry in Vietnam, with Toyota Vietnamas the biggest player, followed by local firm Truong Hai. However, allof them operate on a small scale and boast a localisation rate forcomponents of just 10 percent.
Jesus Metelo N. AriasJr, chairman of Vietnam Automobile Manufacturers’ Association, in aninterview last month with VIR said that the lack of clear and stablepolicies had hindered the development of the car industry in Vietnam.
Arias, also managing director of Ford Vietnam,stressed foreign car-makers and suppliers would continue to invest inVietnam but only if the government maintained a stable policy andreduced business costs.-VNA
