Domestic production to meet demand by 2020

The Prime Minister has just approved the development plan of Vietnam automobile industry to 2020, with a vision to 2030.

The plan aims to develop the automobile industry into one of the key aspects of the country that can meet all needs of the local market on common trucks, cars and some types of specialized vehicles; become a high-value components and accessories providers for the automobile world.

Specific target for passenger cars with less than 10 seats is 60% market requirement in 2020 and 70% in 2030, whereas that number for passenger cars with over 10 seats, trucks and specialized vehicles is 90% and 92%, 78% and 80%, 15% and 20% respectively.

Based on the current capacity and objectives, the plan made by the Ministry of Industry and Trade also stated a production output target. 227.000 units is the industry target in 2020 while that in 2025 and 2030 is 466.000 and 863.000 units (with 452.000 under-10-seat vehicles) respectively.

As for exporting, 20.000 and 30.000 CBU units are expected to be exported in 2020 and 2030 respectively. Meanwhile, component export value is aimed to reach 4 and 6 billion in 2020 and 2030 respectively.

As for the supporting industry, by 2020, the industry is expected to meet 30%-40% requirement for domestic production, thus aiming at taking a part in the component production of world’s automobile industry. By the 2021-2025 period, the number is expected to reach 40-45% and then over 50% (in value) by 2030 and become one important component provider for the world’s automobile industry.

The plan also sets up the highest incentives for environmentally friendly cars. Accordingly, businesses taking part on producing environmentally friendly cars/components will be given: a stabilized credit export policy, preferential treatment from the National Trade Promotion Program… as well as be able to loan from the development and investment fund of the State with low interest rates.

As for consumers, the plan requires “adjust tax and fee policies to develop the automobile industry to meet the needs of the economy and people, synchronized with transport infrastructure and environmentally friendly. The lowest tax level will be applied on short-range and mid-range 16-to-24-seats passenger cars whereas the highest tax level will be applied on under-9-seats passenger cars with a 3.0L engine or higher together with a high environmental fee.

In the end, after quite a long time of building and adjusting, the plan to develop Vietnam automobile industry in the future has finally been completed. This is the 2^nd plan so far, with the first already being deployed for the 2010 – 2020 period but the industry failed in almost any criteria.

Minh Anh

sonhq

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