Engine factory contract inked by VN, S Korea

Viet Nam’s Truong Hai Auto Joint Stock Company (Thaco) and the South Korean Hyundai Motor Corp on Thursday signed an agreement to build an automobile engine manufacturing factory in central Quang Nam Province’s Chu Lai Open Economic Zone.

Capitalised at US$165 million, the 20ha factory will be programmed to produce 25,000 units per year in the first phrase. Its construction is scheduled to begin later this year and completed by the end of next year.

Quang Nam Province People’s Committee said the project would lay the foundation for the development of an auto production centre in several years.

It said the project would be a good example for other foreign investors who wanted to invest in the zone’s industry sector, adding that it was also expected to attract more involved in support industries.

Quang Nam is now developing a draft on the establishment of the auto production centre. The province has also begun talking to several foreign groups involved in manufacturing, automobile assembly and production engineering.

Kia Motor has also showed interest in investing in the zone.

Small car sales slump

Domestic auto sales reached 8,554 units in July, a drop of 11 per cent compared to the same month last year, according to the Viet Nam Automobile Manufacturers’ Association (VAMA).

The strongest decline was in commercial vehicles. Only 1,399 units were sold, a slump of 27 per cent. Multi-purpose vehicle sales reached only 1,611, falling by 13 per cent.

However, sales of four-seater saloons increased by 20 per cent to reach 3,334 units.

The total level of auto sales during the first seven months of this year hit 52,588 units, an increase of 1 per cent over the same period in 2010. — VNS

Tags: Hyundai, Truong Hai Auto, Vietnam automotive, Vietnam automotive industry, Vietnam autos market