Auto industry development plan completed

The Government Office has announced the conclusion of Prime Minister Nguyen Tan Dung at a recent meeting on the Vietnamese automobile industry’s development strategy and plan.

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Illustrative image

At present, Vietnam's auto industry's total capacity for production and assembly has been pegged at 460,000 units per year, with half of them being sedans. However, the local auto industry has not achieved its targets for investment and production because almost all of them are products that require only simple assembly.

Therefore, the PM has asked for close co-ordination and consensus among ministries, especially the Ministry of Industry and Trade (MOIT) and Ministry of Finance (MOF), in their recommendations and drafts to ensure stability and transparency, and to match Vietnam’s integration commitments.

The PM also asked the MOIT and MOF to formulate specific and complete policies on credit, taxation, fees and other issues related to the auto industry and to develop the industry going forward.

Earlier, the Prime Minister passed the auto development strategy until 2025 with a vision towards 2035 with the aim to enable Vietnam to build a strong auto industry and become part of the world’s auto production chain in 2026.

As envisioned in the auto strategy, Vietnam would manufacture some 460,000 vehicles by 2020, three times higher than the volume of cars sold a year at the moment, and more than 1.5 million cars a year in 2035.

In the strategy, 30% of a car’s parts would be made in Vietnam by 2020. Supporting industries are projected to bring in export revenue of US$10 billion by 2035.

To achieve these goals, the government will make it easier for industry players to access preferential credit and incentives, especially manufacturers of eco-friendly automobiles.

It will also encourage public use by offering the lowest taxes on 16-24 seat coaches.

Vehicles of nine to fifteen seats and more will be subject to maximum taxes while models with an engine capacity of more than three litres will face high environmental fees.