Vietnam to Protect Domestic Auto Production till 2018

The Ministry of Industry and Trade (MOIT) is drawing up a plan under which Vietnam will continue protecting domestic automobile production until 2018 by imposing high import tariffs on cars and car components that can be made domestically.

Under the plan, the government should provide loans for bus and truck production projects that have high local content ratio and continue supporting local manufacturers in training and technology.

The government also needs to boost car consumption by providing interest rates subsidies to car buyers, the ministry said.

Taxes on passenger cars of less than nine seats and components imported from Southeast Asian countries will be completely removed in 2018.

Since the Vietnamese auto industry came into being in 1991 with the licensing of the first two joint ventures Mekong and VMC, it has benefited from many preferential policies.

However, analysts say local manufactures have not made full use of these policies to develop a strong industry and the industry still has to import most of the components it needs.

The Southeast Asian country will open the car market completely in 2018 under the framework of the ASEAN Free Trade Agreement (AFTA) and local manufactures need to improve their competitiveness by then.