Vietnam’s automobile industry is transforming drastically but it still lacks scenarios to join the global supply chains after the COVID-19 pandemic.

Prime Minister Nguyen Xuan Phuc has just signed Decree 70 allowing the cut of 50% of the registration fee for customers who buy locally-produced and assembled automobiles, effective June 28.

More people could afford imported cars from the EU when the EU-Vietnam Free Trade Agreement (EVFTA) takes effect from August 1.

The Ministry of Finance is compiling a draft decree on lowering the registration fees of locally assembled or manufactured autos by 50% until the end of this year and will consult other ministries before submitting it to the Government for approval.

The Ministry of Finance plans to eliminate the import tax for auto materials and parts in order to support the development of the country’s automobile industry.

Vietnam has become a large market which earns billions of dollars for Thai and Indonesian manufacturers each year.

Vietnam has continued spending billions of US dollars on importing auto spare parts as the local car industry failed to achieve it's localisation targets.

Vietnam’s policy on tightening control over import and decreased domestic consumption as well as exports in South Korea have prompted South Korean investors to set their car part production bases in Vietnam.

VietNamNet Bridge – The Ministry of Industry and Trade (MOIT) has proposed an original idea – manufacturing car models that other regional production bases do not make.

The Ministry of Industry and Trade has admitted that the plan to develop an automobile industry of Vietnam has failed, but it still insists on protecting domestic assembling enterprises which work for foreign invested enterprises.

Vietnamese auto manufacturers are trying to increase the localization ratios in their products in order to enjoy preferential tariffs when exporting their cars to ASEAN countries.

VietNamNet Bridge - Thanh Cong and Truong Hai are determined to export cars, despite a cut in import tariffs on cars scheduled to take effect in 2018. 

Ninety-six percent of Vietnam’s enterprises are small businesses, with the majority having 10 workers or less. Only 2 percent of enterprises are large in size, while another 2 percent are medium size. 

VietNamNet Bridge - Economists and representatives of Vietnamese automobile enterprises believe the threatened departure of foreign automobile manufacturers would not be a problem for Vietnam.

 VietNamNet Bridge – Representatives of foreign business associations have expressed concern over Vietnam’s visa policy, claiming their member enterprises are having problems with short-stay visa and strict entry regulations.

 VietNamNet Bridge – Deputy Prime Minister Hoang Trung Hai has called on relevant ministries to work closely with the Japanese embassy over the drafting of an action plan for automobile industry development

 VietNamNet Bridge – As the ministries of Finance and Industry and Trade still disagree on tax policies, automobile manufacturers have no other choice than to keep a wait-and-see attitude.

 VietNamNet Bridge – Most low-cost cars introduced in Vietnam have failed to win the hearts of consumers, as many Vietnamese equate low-cost with low-quality.

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