Policy change sought to help auto industry compete with imports

15:50 | 10/12/2019 Society

(VEN) - According to the Ministry of Industry and Trade (MoIT), the domestic automobile industry will face fierce competition from imports, especially from ASEAN countries such as Thailand and Indonesia, and in the next 7-10 years from member states of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the EU-Vietnam Free Trade Agreement.

policy change sought to help auto industry compete with imports
Vietnam needs to raise the added value of the auto industry

Many challenges

The Vietnamese auto industry has developed rapidly in the past two years, with some products exported to Laos, Cambodia, Myanmar, and Central America. Data from the Vietnam Register under the Ministry of Transport shows that the output of domestically manufactured and assembled vehicles was 258,733 units in 2017; 258,116 units in 2018 and 131,089 units in the first six months of 2019.

However, the domestic automobile industry only operates in a low segment of the manufacturing chain, and depends on production assignments of global automobile groups.

Domestic automobile production and assembly have not met the requirements of a real automobile industry, not yet created close cooperation between auto production and assembly businesses or formed a network of large-scale material suppliers and component producers. In addition, car prices remain high compared to other countries in the region while the quality of domestic vehicles is not yet as good as that of the imports.

Seeking solutions in the long run

In order to develop the automobile industry, the MoIT will coordinate with relevant ministries and sectors and seek new policies to speed up progress of large-scale automobile production and assembly projects; attract investment from multinational corporations to undertake large-scale projects of technology transfers and mastery. It will also study a proposal to remove the excise tax on domestically made values applied to under-nine seat cars during a 5-10 year period.

More importantly, support industries need to be developed to raise the added value of the industry in combination with adjustments to a number of government policies and incentives to attract investment in electric car production. According to the experience of some countries in the region like Thailand and Malaysia, the MoIT is also coordinating with the State Bank of Vietnam to appeal to the government for preferential lending policies so that consumers can buy domestically manufactured cars to stimulate demand for the domestic automobile industry.

The MoIT will coordinate with relevant ministries and sectors to propose a number of special support policies regarding infrastructure, land and human resource training for large-scale automobile production and assembly projects (including vehicles run by fossil fuels and electric vehicles).

Lan Anh