Foreign firms show little interest in car market

Vietnam’s struggling automobile industry has received little investment from foreign enterprises and component sourcing remains low, recently released statistics from the Ministry of Finance reveal.

The General Secretary of the Vietnam Society of Automotive Engineers, Du Duc Thinh, said the domestic market took off with an impressive growth rate in south-east Vietnam in 2008 while in other parts of the country the industry has struggled due to low sales.

The news comes despite high levels of Government support for the industry last year: thousands of billions of dong in subsidies, a halving of the value-added tax rate and registration fees, and numerous infrastructure incentives.

Thinh anticipated the quantity of imported automobiles would surge in 2018, while domestically-made cars continue to decline as businesses shift their focus from production to distribution.

Statistics for the year 2008 from the Ministry of Finance show the market now has several famous automotive brand names but local sourcing and investment of foreign-invested businesses remains low.

Experts say targets for the rate of local sourcing have not been met because productivity in the automobile assembly industry remains low. On average, the country’s 54 automobile producers are only able to assemble 2,800 units per year.

“It is for this reason that foreign businesses are not keen on investing in the industry,” experts said.

But recently increased investment has been made by local firms in the industry.

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