Truong Hai Auto Corporation, the largest domestic automobile company inVietnam, has obtained the Government’s permission to extend thetimeline for its manufacturing of Euro 2- and Euro 3-standard engines.Vietnam Investment Review reports.
In anannouncement sent to the company late last month, Deputy Prime MinisterHoang Trung Hai stated the Prime Minister had agreed “in-principle” toallow Chu Lai-Truong Hai engine plant “to manufacture and sell 100,000diesel auto engines until the end of 2018”.
Thepermission followed a plea by the corporation and Quang Nam provincePeople’s Committee to allow the automobile maker to continuemanufacturing and selling the more polluting Euro 2 and Euro 3-standardengine models after January 1.
According to aGovernment decision issued back in 2011, all cars and motorbikesmanufactured or imported in Vietnam would have to meet Euro 4 emissionstandards from January 1, 2017 instead of the current Euro 2 and 3standards.
During the two-year extension, Truong Haimust prepare investment plans and upgrade production lines tomanufacture higher standard engines.
Chu Lai-TruongHai was the first auto engine factory in Vietnam, intended to increasethe localisation rate for the automobile industry. The project, situatedin Chu Lai Economic Zone, Quang Nam province, is worth 182 million USD.
According to Truong Hai, it has signed atechnology transfer contract with the Republic of Korea’s Hyundai MotorCompany to produce about 20,000 Euro 2 and Euro 3 emission standardengines annually.
Under the Government’s roadmap,Chu Lai-Truong Hai would have to stop manufacturing Euro 2- and Euro3-standard engines in January 2017. The company had called for a revisedtimescale as the implementation of higher production standards wouldmake it difficult to produce sufficient numbers of the current enginetypes within just three years.
Quang Nam People’sCommittee pointed out that the technology upgrade for manufacturing Euro4 engines in such a short time would be very costly, backing themanufacturer’s request to extend the timeline for manufacturing Euro 2and Euro 3 engines.
Truong Hai previously obtainedpreferential incentives from the Government for the project whenrecognised as a key national engineering project.
This status allowed the company to take loans up to 85 percent ofproject’s total value from the Vietnam Development Bank with apreferential interest rate over 12 years. Truong Hai would also receive agovernment guarantee when borrowing capital from foreign creditproviders. The company enjoys hugely discounted import and export taxes.
Vietnam’s automobile industry is beset byrelatively scattered designs and low rates of domestication which remainat 7–10 percent for cars and 35-40 percent for trucks.
It has yet to meet the domestic consumer demand that has continuedto increase over the past two decades. Its focus on assembly hasprevented it from developing a complete manufacturing plant.-VNA
In anannouncement sent to the company late last month, Deputy Prime MinisterHoang Trung Hai stated the Prime Minister had agreed “in-principle” toallow Chu Lai-Truong Hai engine plant “to manufacture and sell 100,000diesel auto engines until the end of 2018”.
Thepermission followed a plea by the corporation and Quang Nam provincePeople’s Committee to allow the automobile maker to continuemanufacturing and selling the more polluting Euro 2 and Euro 3-standardengine models after January 1.
According to aGovernment decision issued back in 2011, all cars and motorbikesmanufactured or imported in Vietnam would have to meet Euro 4 emissionstandards from January 1, 2017 instead of the current Euro 2 and 3standards.
During the two-year extension, Truong Haimust prepare investment plans and upgrade production lines tomanufacture higher standard engines.
Chu Lai-TruongHai was the first auto engine factory in Vietnam, intended to increasethe localisation rate for the automobile industry. The project, situatedin Chu Lai Economic Zone, Quang Nam province, is worth 182 million USD.
According to Truong Hai, it has signed atechnology transfer contract with the Republic of Korea’s Hyundai MotorCompany to produce about 20,000 Euro 2 and Euro 3 emission standardengines annually.
Under the Government’s roadmap,Chu Lai-Truong Hai would have to stop manufacturing Euro 2- and Euro3-standard engines in January 2017. The company had called for a revisedtimescale as the implementation of higher production standards wouldmake it difficult to produce sufficient numbers of the current enginetypes within just three years.
Quang Nam People’sCommittee pointed out that the technology upgrade for manufacturing Euro4 engines in such a short time would be very costly, backing themanufacturer’s request to extend the timeline for manufacturing Euro 2and Euro 3 engines.
Truong Hai previously obtainedpreferential incentives from the Government for the project whenrecognised as a key national engineering project.
This status allowed the company to take loans up to 85 percent ofproject’s total value from the Vietnam Development Bank with apreferential interest rate over 12 years. Truong Hai would also receive agovernment guarantee when borrowing capital from foreign creditproviders. The company enjoys hugely discounted import and export taxes.
Vietnam’s automobile industry is beset byrelatively scattered designs and low rates of domestication which remainat 7–10 percent for cars and 35-40 percent for trucks.
It has yet to meet the domestic consumer demand that has continuedto increase over the past two decades. Its focus on assembly hasprevented it from developing a complete manufacturing plant.-VNA
