Thanh Cong, Hyundai Motor join hands to produce automobiles
Hanoi
(VNA) – Thanh Cong Group on March 30 signed a cooperation agreement with the
Republic of Korea’s Hyundai Motor Company on forming a venture to expand the assembling
of automobiles in Vietnam.
Le Ngoc Duc,
Director General of Hyundai Thanh Cong company under Thanh Cong Group, said
Hyundai Motor decided to choose Thanh Cong as its partner in the region based
on the group’s achievements in the past years.
The venture is
also part of Hyundai Motor’s strategy in expanding its global production base, with
ASEAN as a potential market.
It is noteworthy
that the decision is made at a time when the deadline is approaching (2018) for
the reduction of import tariffs on completely-built-units (CPU) from ASEAN
countries to zero, under the ASEAN Trade in Goods Agreement (ATIGA).
According to
Duc, this is a chance for Thanh Cong Group to develop the local support
industry, a move in line with the development strategy for the auto industry approved
by the Government.
In the initial
phase, the Hyundai – Thanh Cong Joint Venture will maintain the current factory
with a capacity of 40,000 vehicles per year in Ninh Binh province and invest in
expanding it in the near future, using up-to-date technologies of Huyndai
group.
With the joint
venture, the rate of completely knocked down (CKD) vehicles among Hyundai
products available in Vietnam will be raised from 20 percent to 80 percent in
the latter half of 2017 and 90 percent in 2018.
Hyundai Thanh
Cong also aims for a localisation rate of 40 percent to be eligible for the
zero percent tariff rate when exporting its vehicles to other ASEAN countries.-VNA