Vietnam to support auto parts production with tax breaks, credit access

Local auto companies will be supported by the government

The government will continue to provide incentives for car parts producers to boost the local auto industry, which has been struggling for years depsite considerable preferential treatment.

According to a report on news website VnExpress Sunday, local auto companies manufacturing 15 priority products including engines, frames, wheels and lights will be eligible for tax breaks and favorable credit policies.

The government will also offer assistance in infrastructure development, land leasing, human resource training and other technical support, VnExpress reported.

Other industries to receive the incentives are garment, footwear, IT, mechanical engineering and hi-tech support industries.

The government’s renewed commitment to the auto industry came after experts criticized the sector for its poor performance after benefiting from many favorable tax polices over the past 20 years. Cars of nine seats, for instance, were supposed to have a 50 percent local content by 2010, but the actual ratio was only 15 percent.

The Ministry of Industry and Trade also plans to continue supporting the industry, targeting an annual output of 361,000 cars a year by 2020, meeting 65-68 percent of local demand.

Tags: Vietnam automotive, Vietnam automotive industry, Vietnam autos market