Cars Made In Vietnam: Who Is A Great Investment?

Time is running out, still waiting

The Strategy and Planning for the development of Vietnam's automobile industry for the new and upcoming import and export workshops for the next year were approved by the Prime Minister at the end of the month of October, October and October.

Many goals and ambitions are set for the Vietnamese automobile industry, but the question is, who will assume this responsibility? So far there is no clear answer. Certainly, to develop the automobile industry, it must rely on enterprises, but enterprises themselves are struggling, it is unclear how.

A series of well-known FDI automobile enterprises, with strong financial resources, strong brands, technological know-how, and sufficient production capacity, have yet to decide whether or not to invest in automobile production in Vietnam. Male. All are still waiting for specific policies from the Government.

Many car manufacturing projects are waiting for more specific policies

With 100% domestic enterprises, Xuan Kien Automobile Joint Stock Company (Vinaxuki) has invested heavily in automobile production, from mold processing, vehicle body stamping, plasma cutting equipment, and welding. , modern paint ... can produce all kinds of car frames, including cars with under 9 seats, with the localization rate of over 40%. However, this company is in trouble due to lack of capital and cannot bring to the market any remarkable models, including trucks, are having to sell scrap for wages to pay employees.

Truong Hai Group, in addition to trucks and passenger cars, is also assembling a series of car brands such as Mazda, Kia, and Peugeot ... In addition to modern vehicle assembly lines, Truong Hai has invested in manufacturing a number of components. , but mainly still simple products such as windshield, seats, front bumper ...

The most popular project of this company is to produce a technology-transferred engine from the Korean corporation Hyundai, but it ended in early 2014. Reason: Time of commitment to transfer technology has expired. is still under construction. The project to produce a new car engine is in negotiation with Hyundai, hopefully 2016 will restart and produce a standard engine Euro 4, not Euro 2 as before. However, success or not depends on the "nod" of Hyundai, which is still unclear.

Hyundai Thanh Cong Company has just completed the investment stage of the automobile factory's 1, with a total capital of US $ million of US $ 500 million, including an auto welding frame of the capacity of 80 cars of all kinds / year. Hyundai Thanh Cong said that it will promote the investment in 40.000 stage, with the body stamping workshop, will invest in manufacturing some electronic components, according to technology transfer of Hyundai Korea. The goal is to achieve the localization rate of 2%, enjoying preferential treatment when exporting cars to Southeast Asian countries. However, with the bodywork project, which requires a large investment, along with a large production output, it will be difficult to succeed and it is unclear when it will start.

A foreign investor, Mazda, is also planning to set up a joint venture with Truong Hai to invest in an automobile factory with a localization rate of 40% in the year of 2018, until now, it is still waiting for specific policies from the Government. covered.

While FDI enterprises do not make clear decisions, domestic enterprises face many problems such as lack of capital, lack of technology, experience, and weak brand names, while automobile production requires a large investment. for research and development, experimentation… but time cannot wait.

Vietnamese automobile industry: A dream will come true?

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Opportunities no longer exist

News from the Ministry of Industry and Trade said that there will be no more special excise tax policy for cars because the Law amending and supplementing a number of articles of the Special Consumption Tax Law recently passed by the National Assembly from 1 / 1 / 2016. After each year of import and export, the Government will consider issuing a roadmap for reducing special consumption tax on this item. Earlier, at the Government's meeting, the ministries also agreed to keep the import tariff schedule of cars under the commitments to join AFTA as promulgated.

Specifically, in the year of 2015, the import tax rate of CBU cars from ASEAN to Vietnam remained at 50%, to 2016 decreased to 40%, 2017 decreased to 30% and to 2018% to 0%.

According to the general assessment of experts, the advantage will belong to CBU imports, due to the sharp reduction of import tax rates and also the special consumption tax equivalent to that of domestic cars. Thus, automobile businesses in Vietnam are at risk of difficult to survive in the coming time.

Mr. Duong Dinh Giam, Director of the Institute of Industrial Strategy and Policy (Ministry of Industry and Trade), said: “When developing the Automotive Planning and Strategy, we expect policies - specifically the excise tax. difference - will be reduced and implemented from the beginning of 2015. Thus, the auto market will quickly increase in size and businesses have time to increase output, thereby helping to promote investment in localization. But with the special consumption tax law amended and supplemented this time, no more amendments are allowed, it is too late to wait 3 years ”.

The company hopes the authorities will set up technical barriers to protect domestic vehicles. However, an engineer of Toyota Vietnam, said that this is considered to be ineffective, because the automobile exporting countries in the region have a higher technical level than ours, so it is difficult to be feasible. Other barriers such as tightening the registration of imported vehicles, only allowing imports at 2 seaports, requiring the dealer selling imported vehicles to deposit ... only cause difficulties, not prevent cars from importing, because domestic vehicles 20% higher cost than imported cars.

The objective of developing the automotive industry is to promote and improve the localization rate. To do so, the supporting industry must be developed. In contrast, in order to develop supporting industries, firstly, it is necessary to maintain the existence of automobile assembling enterprises. Without assembly there is no component manufacturing. The automobile businesses are no longer available, so will the automobile industry wither.