Vietnam aims to produce 1.53 million vehicles (PC+LCV) in 2035
- In July 2014, the Vietnamese government approved the country’s long-term automotive industry strategy. Since the automotive industry is positioned as one of the country’s key sectors, support to this industry is to be strengthened. Vehicle production target is set at 228 000 units for 2020 (including 20 000 units for export), 466 000 units in 2025 (37 000 units for export) and 1,53 million units in 2035 (90 000 units for export).
- Vehicle types (segment or body) that will be primarily developed are light utility vehicles (LUV), short/medium buses, fuel-efficient small passenger cars (A and B segments), and special purpose vehicles (SPV).
- The different ministries involved in this plan (Ministry of Industry and Trade, Ministry of Planning and Investment, Ministry of Science and Technology) are planning a policy system to attract foreign investment (incentives and taxes, technology foundations for local vehicle production). But today, the Vietnamese government is focused on ensuring tax revenues, restricting trade deficit and easing congestion in cities without dismissing the plan for active industry development.
- Concrete measures to realise the long-term goal are yet to be announced. In order to face the increasing competition from Thailand, Indonesia, Malaysia and other ASEAN countries, Vietnam must reduce value-added tax, special consumption tax, and registration tax among other burdens on locally-made models, introduction of incentives to attract foreign investors and select strategic vehicles more thoroughly.
- Although, Vietnam has a strong potential for becoming an important vehicle market, the current poor competitiveness of local production plants calls for support measures from the government.
Contact us: info@inovev.com