The domestic automobile industry faces the risk of collapse, withboth consumers and manufacturers shifting to imports, according to theTuoi tre (Youth) newspaper.
A resident of Hanoi's Cau Giaydistrict said he had decided to spend more than 600 million VND (28,570USD) on a five-seat Mitsubishi Attrage CVT, which is imported fromThailand, despite studying domestically-assembled sedans.
"Aftertesting several domestic cars my friends own, I believe this importedone is more comfortable...and its price is quite reasonable," theunnamed motorist added.
Imported cars have reportedly attractedmore buyers recently, thanks to their better quality. In particular, thenumber of vehicles from Thailand is increasing, given the variety ofcategories and advantages related to import duties that they offer.
Grasping this trend in the last year, some manufacturers gradually shifted from assembling to importing cars.
VinaStar Motors (VSM), a joint venture of Vietnamese, Japanese andMalaysian firms in the southern province of Binh Duong and a soledistributor of Mitsubishi vehicles in Vietnam, is one such example.
General Director of VSM Kazuhiro Yamana told Tuoi tre that thecompany's plant in HCM City's Hiep Binh Chanh district now focuses onlyon assembling the Pajero Sport, rolling out about 100 vehicles permonth, whereas this workshop used to manufacture 410 units every month.
Inthe last fiscal year, between April 2014 and March 2015, VSM sold 2,530vehicles of different kinds, with as many as 1,660 autos imported fromThailand and Japan.
"Although the total sales reflect only around80 percent of our target, the figure rose by 59 percent from theprevious fiscal year," Yamana pointed out.
VSM has reportedlyimported the most number of completely built units (CBUs) among membersof the Vietnam Automobile Manufacturers' Association (VAMA).
Yamananoted that his company had carefully considered importing either CBUsor completely knocked down items for domestic assembly, with the latterhaving minimised costs for consumers.
Moreover, General Directorof Toyota Vietnam Yoshihisa Maruta said in a meeting earlier this monththat his company now "stands at a crossroad", as it will also have tochoose between maintaining production or shifting to imports, takinginto account that tariffs on CBU imports in Southeast Asia will be zeropercent in the next three years.
In addition, the VAMA revealedthat it was unaware of what support policies the Government will take tohelp automakers continue with their manufacturing operations.
According to the calculations of members of the association, carprices in Vietnam are some 2.5 times higher than those in other ASEANmember states due to tax-related reasons, and this reduces thecompetitiveness of domestically-assembled vehicles.
Specialconsumption taxes alone have caused prices of the assembled cars to costat least 5 percent higher than those of CBUs, Yamana revealed.
Ata conference held in Hanoi on April 9, Chairman of the VietnamAssociation of Foreign Invested Enterprises, Nguyen Mai, suggested areduction in import taxes imposed on car components be offered.
"Ifthese taxes are not lowered, Toyota and several other automobileenterprises will certainly have to turn to imports in the future. Theywill not be fools by continuing to import components for assembly," heremarked.
According to Mai, Vietnam has implemented strategiesfor the automobile industry since 1991, and now manufactures about120,000 vehicles per year.
In comparison, Thailand also beganimplementing strategies for this sector in 1991, but manufactures about2.5 million vehicles and exports 1.45 million units every year.
Furthermore,sources of Tuoi tre estimated that the average price of five-seat carsimported by Vietnam from Thailand will fall from 24,750 USD in 2015 to16,500 USD in 2018.
An official of the Ministry of Financetold the newspaper that the agency was coordinating with the Ministry ofIndustry and Trade to seek measures to reduce import taxes on carcomponents.-VNA
A resident of Hanoi's Cau Giaydistrict said he had decided to spend more than 600 million VND (28,570USD) on a five-seat Mitsubishi Attrage CVT, which is imported fromThailand, despite studying domestically-assembled sedans.
"Aftertesting several domestic cars my friends own, I believe this importedone is more comfortable...and its price is quite reasonable," theunnamed motorist added.
Imported cars have reportedly attractedmore buyers recently, thanks to their better quality. In particular, thenumber of vehicles from Thailand is increasing, given the variety ofcategories and advantages related to import duties that they offer.
Grasping this trend in the last year, some manufacturers gradually shifted from assembling to importing cars.
VinaStar Motors (VSM), a joint venture of Vietnamese, Japanese andMalaysian firms in the southern province of Binh Duong and a soledistributor of Mitsubishi vehicles in Vietnam, is one such example.
General Director of VSM Kazuhiro Yamana told Tuoi tre that thecompany's plant in HCM City's Hiep Binh Chanh district now focuses onlyon assembling the Pajero Sport, rolling out about 100 vehicles permonth, whereas this workshop used to manufacture 410 units every month.
Inthe last fiscal year, between April 2014 and March 2015, VSM sold 2,530vehicles of different kinds, with as many as 1,660 autos imported fromThailand and Japan.
"Although the total sales reflect only around80 percent of our target, the figure rose by 59 percent from theprevious fiscal year," Yamana pointed out.
VSM has reportedlyimported the most number of completely built units (CBUs) among membersof the Vietnam Automobile Manufacturers' Association (VAMA).
Yamananoted that his company had carefully considered importing either CBUsor completely knocked down items for domestic assembly, with the latterhaving minimised costs for consumers.
Moreover, General Directorof Toyota Vietnam Yoshihisa Maruta said in a meeting earlier this monththat his company now "stands at a crossroad", as it will also have tochoose between maintaining production or shifting to imports, takinginto account that tariffs on CBU imports in Southeast Asia will be zeropercent in the next three years.
In addition, the VAMA revealedthat it was unaware of what support policies the Government will take tohelp automakers continue with their manufacturing operations.
According to the calculations of members of the association, carprices in Vietnam are some 2.5 times higher than those in other ASEANmember states due to tax-related reasons, and this reduces thecompetitiveness of domestically-assembled vehicles.
Specialconsumption taxes alone have caused prices of the assembled cars to costat least 5 percent higher than those of CBUs, Yamana revealed.
Ata conference held in Hanoi on April 9, Chairman of the VietnamAssociation of Foreign Invested Enterprises, Nguyen Mai, suggested areduction in import taxes imposed on car components be offered.
"Ifthese taxes are not lowered, Toyota and several other automobileenterprises will certainly have to turn to imports in the future. Theywill not be fools by continuing to import components for assembly," heremarked.
According to Mai, Vietnam has implemented strategiesfor the automobile industry since 1991, and now manufactures about120,000 vehicles per year.
In comparison, Thailand also beganimplementing strategies for this sector in 1991, but manufactures about2.5 million vehicles and exports 1.45 million units every year.
Furthermore,sources of Tuoi tre estimated that the average price of five-seat carsimported by Vietnam from Thailand will fall from 24,750 USD in 2015 to16,500 USD in 2018.
An official of the Ministry of Financetold the newspaper that the agency was coordinating with the Ministry ofIndustry and Trade to seek measures to reduce import taxes on carcomponents.-VNA
