Vietnam seeks to promote automobile industry

Thursday, 2017-08-10 18:33:39
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This market’s opening will reduce competitiveness and threaten the survival and development of the domestic automobile industry.
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NDO - The Central Institute for Economic Management (CIEM) on August 10 held a seminar on the development of automobile clusters in the world and experience for Vietnam.

Nguyen Thi Tue Anh, CIEM Vice President stated that Vietnam has shaped a policy to target the development of the automobile industry. This policy has been intended to develop the industry for a long time now, however the domestic automobile industry remains underdeveloped.

She pointed out many reasons including small market size and low purchasing power in addition to the lack of appropriate mechanisms and policies to encourage the industry development.

The Ministry of Industry and Trade is now building a policy to support the development of the automobile industry, which aims to reduce costs for businesses participating in the industry in order to improve the production efficiency and competitiveness.

Experiences from foreign countries displayed that Vietnam needs to actively mobilise resources, particularly grey matter, finances and technology to set up concentrated automobile industrial clusters with supporting enterprises in order to be a key force in the automobile industry.

According to experts, enterprises operating in the cluster must maintain a close trading partnership in a professional manner at a high level which is yet to be established in Vietnam..

Nguyen Thi Xuan Thuy from the Institute for Industrial Policy and Strategy under the Ministry of Industry and Trade said that Vietnam has a potential automobile market due to its large population and high GDP growth rate. However, the domestic industry will have to face tough competition from the beginning of 2018 when imported cars from ASEAN to Vietnam are not taxed.

Meanwhile, vehicles domestically assembled are subject to import duties on components in addition to low localisation rates which may lead to higher prices than imported ones from Thailand and Indonesia.

This market’s opening will reduce competitiveness and threaten the survival and development of the domestic automobile industry.

Experts stated that increasing local content in the production of automobile parts is an important and long-term goal of Vietnam's automobile industry. Thus, the Government should take appropriate measures to support enterprises, especially in the form of supporting industries on the basis of cost reduction and the application of high technology.

Enterprises suggest that the Government and authorised agencies study and apply a consistent, clear and easy-to-follow policy so that they can determine their development orientations and targets in a rational and stable manner.