Vietnam car industry ‘could collapse’

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Vietnam autoVietnam’s automotive industry faces a major challenge under commitments to the ASEAN Free Trade Area (Afta) which will abolish auto import taxes in 2018.

The ASEAN+3 region plans to waive taxes on car imports between the ten ASEAN member countries, as well as Japan, South Korea and China, who are party to the agreement.

Under the new agreement, Vietnam has only five years to develop its auto industry to compete with an impending influx of imports after 2018, otherwise it could collapse due to a lack of competiitveness.

There are currently 18 auto makers that are members of the Vietnam Automobile Manufacturers Association. Plus around 30 others, they have a combined investment of over $1 billion and an output over 200,000 cars per year, but are mostly behind their targets. Vietnam also hosts 210 auto parts manufacturers, one fifth of Indonesia’s production base and one fifteenth of Thailand’s.

Thus, the tax cut poses a disastrous threat to Vietnam’s fledgling auto industry, unable to compete with the price and quality of imports, experts say.

“If we do not make immediate measures, Vietnam would become a big auto importer in the region” said Ngo Van Tru, Deputy Head of the Heavy Industry Department of the Ministry of Industry and Trade.

According to the General Director of Toyota Vietnam Yoshihisa Maruta, a long term development plan, “stable policies and greater incentives” for auto makers would provide a necessary boost to Vietnam’s auto industry.

General Motors Vietnam General Director Guarav Gupta, called on the government to develop a detailed plan to support the local auto industry and boost investor confidence.

Vietnam Automobile Manufacturers Association said that domestic auto sales exceeded 49,800 units in the first half of this year, up 16 per cent on 2012 figures. Car and truck sales grew 22 per cent and 13 per cent, respectively, from 2012. It forecasts indicate sales will reach 112,000 units after a proposed 10-12 per cent cut in auto registration fees.

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Reading Time: 2 minutes

Vietnam’s automotive industry faces a major challenge under commitments to the ASEAN Free Trade Area (Afta) which will abolish auto import taxes in 2018.

Reading Time: 2 minutes

Vietnam autoVietnam’s automotive industry faces a major challenge under commitments to the ASEAN Free Trade Area (Afta) which will abolish auto import taxes in 2018.

The ASEAN+3 region plans to waive taxes on car imports between the ten ASEAN member countries, as well as Japan, South Korea and China, who are party to the agreement.

Under the new agreement, Vietnam has only five years to develop its auto industry to compete with an impending influx of imports after 2018, otherwise it could collapse due to a lack of competiitveness.

There are currently 18 auto makers that are members of the Vietnam Automobile Manufacturers Association. Plus around 30 others, they have a combined investment of over $1 billion and an output over 200,000 cars per year, but are mostly behind their targets. Vietnam also hosts 210 auto parts manufacturers, one fifth of Indonesia’s production base and one fifteenth of Thailand’s.

Thus, the tax cut poses a disastrous threat to Vietnam’s fledgling auto industry, unable to compete with the price and quality of imports, experts say.

“If we do not make immediate measures, Vietnam would become a big auto importer in the region” said Ngo Van Tru, Deputy Head of the Heavy Industry Department of the Ministry of Industry and Trade.

According to the General Director of Toyota Vietnam Yoshihisa Maruta, a long term development plan, “stable policies and greater incentives” for auto makers would provide a necessary boost to Vietnam’s auto industry.

General Motors Vietnam General Director Guarav Gupta, called on the government to develop a detailed plan to support the local auto industry and boost investor confidence.

Vietnam Automobile Manufacturers Association said that domestic auto sales exceeded 49,800 units in the first half of this year, up 16 per cent on 2012 figures. Car and truck sales grew 22 per cent and 13 per cent, respectively, from 2012. It forecasts indicate sales will reach 112,000 units after a proposed 10-12 per cent cut in auto registration fees.

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