Vietnam needs a range of sound policies to develop the automobile sector in the face of fierce competition with foreign rivals as the import tariff will slump to zero percent once the country joins the ASEAN Free Trade Area by 2018.
Photo: VNA
Over the past 20 years, the sector has relied on simple techniques like welding, paint spraying and assembling with a low rate of local input materials.
Eighteen foreign-invested and 38 home firms are assembling around 460,000 vehicles per year, including 200,000 cars, 215,000 trucks and other varieties, generating over 1 billion USD in tax revenue alone to the State budget each year.
However, the average rate of locally-made materials ranges between 7 and 10 percent, resulting in higher manufacturing costs than others in the region.
Chairman of the Vietnam Automobile Manufacturers’ Association and Ford Vietnam General Director Metelo Arias said the sector is hampered by ever-changing policies and an underdeveloped support industry.
He pointed to the paradox that while Vietnam wants to build up a modern automobile industry, it issues a series of policies to limit the use of personal vehicles. Particularly, a series of new tax and spare part policies are discouraging investors.
For automakers, their business plan often lasts for at least five years. If the market moves uncertainly, it will become hard for them to go further.
Head of the Institute for Strategic Research under the Ministry of Industry and Trade Duong Dinh Giam described Thailand and Indonesia’s automobile industry policies as invaluable to other ASEAN member countries, including Vietnam.
Giam said the two nations have outlined detailed and long-term goals on their road to becoming major Asian automakers.
Contemplating opportunities ahead, he said the Government still pinpoints car manufacturing as a core industry with a focus to stimulate both production and consumption.
Under the draft plan on Vietnam’s automobile industry development until 2020, with a vision to 2030, the country will produce automobiles with less than nine seats in high volume.
Giam further said that the Government has lessened car registration fees and corporate taxes, boding well for the market. At the same time, automakers must do all they can to increase the rate of their locally-made materials and competitive edge.
Arias shared view that Vietnam should issue support policies, including lower taxes as its manufacturing costs are 20 percent higher than those of other countries in the region.
The year 2020 is forecast to start the booming use of cars with about 400,000 units each year, and around 2 million by 2030. Those with less than nine seats make up some 70 percent of the total demand. If the domestic supply is yet to satisfy needs, the country must spend over 10 billion USD on annual imports.-VNA
Đăng ký: VietNam News