Vietnamese automobile makers import 80% of spare parts according to the Ministry of Industry and Trade.
In a report presented at the meeting with the Vietnam Automobile Manufacturers’ Association on November 3, Luong Duc Toan, deputy head of the department of industrial manufacturing under the Ministry of Industry and Trade said that the Vietnamese automobile industry has yet to reach its real target.
“There have not been proper co-operation between local carmakers and components suppliers,” the report said. Vietnam’s localisation rate was poor compared with other countries in the region.”
According to the official, Vietnamese auto manufacturers are now importing 80% of key parts such as engines, control systems and transmission gears; and this has led to the domestic car prices of between 10-20% higher than cars imported from other Southeast Asian countries.
The report also said that Vietnam produced 330,000 cars in 2019 and despite the challenges posed by the Covid-19 pandemic, over 160,000 cars were made in Vietnam in the first nine months of this year.
Speaking at the meeting, deputy director of the General Department of Vietnam Customs Luu Manh Tuong said that more than half a billion dollars in tax returns have been awarded to firms since 2017 in a bid by the government to boost the country’s auto industry and supporting industry.
“The tax incentives are in line with Government Decision 57/2020/NĐ-CP, a policy package aimed at bolstering the development of the auto industry in the next four years, he said.
Nguyen Trung Hieu from Vietnam Automobile Manufacturers’ Association (VAMA) told the meeting that the automobile industry of Vietnam, though formed some 30 years later than some neighbouring countries like Thailand, Indonesia, or Malaysia, has seen fast development thanks to due attention from the government and efforts from local firms. The number of cars made or assembled in Vietnam has risen sharply.
The country is now home to more than 40 auto manufacturers with some strong companies including TC Motor, Truong Hai (Thaco), and VinFast.
The VAMA representative said the policy package gave the auto industry a much-needed boost to catch up with the competition in Southeast Asia.
This article was originally published in Dtinews