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Automobile industry domestication yet come into reality, Vama chair says
2009-1030
Carmakers in Vietnam are facing the big question that what they will do in 2018 when the countries signing Asean Free Trade Agreement (Afta) apply the tariff of 0 percent and car usage will be popular by that time.
Over 20 managing directors in Asia Pacific region and senior representatives of Kia Motor attended the recent conference discussing the important issue of car firm's regional strategy. The conference outlined new ideas for the car production industry in Vietnam.
Currently, the car and component import tariff in Vietnam remains high so the car price is higher three times than Europe market while Vietnam's income per person is only $1,000 a year. The nearly 100 million person country is still a big market for car giants from Japan, US and Korea to enter. Even, a high volume of China made low cost cars, especially kinds of trucks, also silently is being imported to the country.
At the ceremony of signing partnership deal with Goodyear International-US car tyre maker, Tran Ba Duong, chair of Truong Hai Automobile JSC (Thaco Group) said that it takes so so long Vietnam could make a car by itself because a car has total 18,000 components. However, now is the opportunity for Vietnam to join the global production value chain of foreign big car firms through taking advantages of AFTA. This will create better conditions for Vietnam's domestication strategy for automobile industry in Asean after 2018.
It is said that the country's automobile component domestication programme seems to go under bankruptcy. But Akito Tachibana, general director of Toyota Vietnam cum chair of Vietnam Automobile Manufactures Association (VAMA) replied that the programme has not come into reality because the production output is not enough to reduce production costs.
In fact, Vietnamese consumers still have to queue up buying cars for long, especially kind of tourism cars because of the scare supply and expensive prices.
Labour assignment under the globalisation law made the car production dream in Vietnam hard to become true. At present, Toyota's Innova product reaches only 37 percent of domestication ratio while the ratio of Thaco Group is 40 percent for kinds of buses and trucks.
Vietnam cannot produce many automobile components. Among kinds of tyres, Vietnam can manufacture truck tyres only while tyres for tourism cars have to be imported. Mai Phuoc Nghe, general director of Thaco Group's distribution division stated that Vietnamese firms cannot catch up with global well known tyre makers with hundred of year production history like Goodyear.
The last opportunity for Vietnam's car industry development is to join the global automobile production value chain of foreign giants. After Malaysia, Vietnam (with the partner Thaco Group)-the second country of Afta region are selected to join the Hyundai-Kia production system. Thaco Group will produce some components for Hyundai-Kia and the cars assembled in Thaco factories will be built from components imported from that production chain's suppliers.
Recently, Vinaxuki purchased production technology of a Japanese firm to upgrade the production value. The products "made in Korea", "made in Malaysia" or "made in Vietnam" all have general origin because the components shaping these cars are produced from the same chain.
Over 20 managing directors in Asia Pacific region and senior representatives of Kia Motor attended the recent conference discussing the important issue of car firm's regional strategy. The conference outlined new ideas for the car production industry in Vietnam.
Currently, the car and component import tariff in Vietnam remains high so the car price is higher three times than Europe market while Vietnam's income per person is only $1,000 a year. The nearly 100 million person country is still a big market for car giants from Japan, US and Korea to enter. Even, a high volume of China made low cost cars, especially kinds of trucks, also silently is being imported to the country.
At the ceremony of signing partnership deal with Goodyear International-US car tyre maker, Tran Ba Duong, chair of Truong Hai Automobile JSC (Thaco Group) said that it takes so so long Vietnam could make a car by itself because a car has total 18,000 components. However, now is the opportunity for Vietnam to join the global production value chain of foreign big car firms through taking advantages of AFTA. This will create better conditions for Vietnam's domestication strategy for automobile industry in Asean after 2018.
It is said that the country's automobile component domestication programme seems to go under bankruptcy. But Akito Tachibana, general director of Toyota Vietnam cum chair of Vietnam Automobile Manufactures Association (VAMA) replied that the programme has not come into reality because the production output is not enough to reduce production costs.
In fact, Vietnamese consumers still have to queue up buying cars for long, especially kind of tourism cars because of the scare supply and expensive prices.
Labour assignment under the globalisation law made the car production dream in Vietnam hard to become true. At present, Toyota's Innova product reaches only 37 percent of domestication ratio while the ratio of Thaco Group is 40 percent for kinds of buses and trucks.
Vietnam cannot produce many automobile components. Among kinds of tyres, Vietnam can manufacture truck tyres only while tyres for tourism cars have to be imported. Mai Phuoc Nghe, general director of Thaco Group's distribution division stated that Vietnamese firms cannot catch up with global well known tyre makers with hundred of year production history like Goodyear.
The last opportunity for Vietnam's car industry development is to join the global automobile production value chain of foreign giants. After Malaysia, Vietnam (with the partner Thaco Group)-the second country of Afta region are selected to join the Hyundai-Kia production system. Thaco Group will produce some components for Hyundai-Kia and the cars assembled in Thaco factories will be built from components imported from that production chain's suppliers.
Recently, Vinaxuki purchased production technology of a Japanese firm to upgrade the production value. The products "made in Korea", "made in Malaysia" or "made in Vietnam" all have general origin because the components shaping these cars are produced from the same chain.
Source: Intellasia
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