Tax breaks and land lease incentives would be offered to boost thedomestic auto industry with the aim of making auto production a keyVietnamese industry by 2020, according to a draft considered by theMinistry of Industry and Trade (MoIT).
The finaldraft on Vietnam's auto development strategy to 2020, with a visionto 2030, has been completed by MoIT for submission to the Governmentfor approval. The document notes several crucial targets, includingincreasing exports and setting up an auto manufacturing and support hubin central Vietnam with total investment worth 30 trillion VND (1.46billion USD).
The ministry said the establishment of theauto production centre in Chu Lai Open Economic Zone, central QuangNam Province , during the next several years would help boost thedomestic auto industry at a time when many taxes on auto imports wereset to be removed.
The centre is expected to produce auto parts for 40 to 80 percent for all vehicles made in Vietnam .
In an effort to set up the auto manufacturing centre soon, QuangNam Province has completed a plan on building a national mechanicalauto centre with initial investments from two South Korean auto makers,Kia and Hyundai.
The province has also requested theGovernment to allow Quang Nam to support site clearance and giveland lease exemptions with full infrastructure for investors duringconstruction work on the project.
In regards to taxpolicies, Quang Nam is proposing to collect a corporate income taxof 10 percent during the project's first 30 years. In addition,investors would be given a corporate income tax exemption during thefirst 10 years of making a profit and a 50 percent reduction for thenext nine years.
Also, import and special consumptiontaxes would be extended and many other soft policies would be offeredfor investors in the auto centre.
Meanwhile, MoIT hassuggested a corporate income tax rate of 10 percent for the entire lifeof the project, a 50 percent reduction of special consumption tax forauto projects that meet criteria on localisation ratios.
The ministry forecast domestic auto demand would surge, with 400,000 to600,000 vehicles sold per year by 2020 when the nation's average percapita income is expected to reach 2,844 USD per annum.
By2030, domestic auto demand would reach nearly 900,000 to 1.8 millionvehicles per year. Of this, demand for cars would account for more than60 percent and passenger cars, trucks and special vehicles would accountfor the remainder.
The strategy also aims to boost salesof cars made in Vietnam , expanding the domestic industry'sproduction capacity to 430,800 vehicles per year by 2020. The localityproportion is expected to reach 50 percent to 60 percent by the sameyear.
The auto industry is expected to export 65,000vehicles per year by 2020, along with a total export turnover of 4billion USD from auto parts.
At a recent seminar, severaldomestic auto producers said that soft policies should not only apply toauto manufacturers who set up their factories at Chu Lai, but that thenew strategy should be based on the current situation in order to takeadvantage of capital already invested.
They said authorities should review current trends in the auto industry to help it develop in a sustainable way.
Experts said authorities should be cautious when giving too manyincentives to auto makers as they might not increase their localityproportion commitments./.
The finaldraft on Vietnam's auto development strategy to 2020, with a visionto 2030, has been completed by MoIT for submission to the Governmentfor approval. The document notes several crucial targets, includingincreasing exports and setting up an auto manufacturing and support hubin central Vietnam with total investment worth 30 trillion VND (1.46billion USD).
The ministry said the establishment of theauto production centre in Chu Lai Open Economic Zone, central QuangNam Province , during the next several years would help boost thedomestic auto industry at a time when many taxes on auto imports wereset to be removed.
The centre is expected to produce auto parts for 40 to 80 percent for all vehicles made in Vietnam .
In an effort to set up the auto manufacturing centre soon, QuangNam Province has completed a plan on building a national mechanicalauto centre with initial investments from two South Korean auto makers,Kia and Hyundai.
The province has also requested theGovernment to allow Quang Nam to support site clearance and giveland lease exemptions with full infrastructure for investors duringconstruction work on the project.
In regards to taxpolicies, Quang Nam is proposing to collect a corporate income taxof 10 percent during the project's first 30 years. In addition,investors would be given a corporate income tax exemption during thefirst 10 years of making a profit and a 50 percent reduction for thenext nine years.
Also, import and special consumptiontaxes would be extended and many other soft policies would be offeredfor investors in the auto centre.
Meanwhile, MoIT hassuggested a corporate income tax rate of 10 percent for the entire lifeof the project, a 50 percent reduction of special consumption tax forauto projects that meet criteria on localisation ratios.
The ministry forecast domestic auto demand would surge, with 400,000 to600,000 vehicles sold per year by 2020 when the nation's average percapita income is expected to reach 2,844 USD per annum.
By2030, domestic auto demand would reach nearly 900,000 to 1.8 millionvehicles per year. Of this, demand for cars would account for more than60 percent and passenger cars, trucks and special vehicles would accountfor the remainder.
The strategy also aims to boost salesof cars made in Vietnam , expanding the domestic industry'sproduction capacity to 430,800 vehicles per year by 2020. The localityproportion is expected to reach 50 percent to 60 percent by the sameyear.
The auto industry is expected to export 65,000vehicles per year by 2020, along with a total export turnover of 4billion USD from auto parts.
At a recent seminar, severaldomestic auto producers said that soft policies should not only apply toauto manufacturers who set up their factories at Chu Lai, but that thenew strategy should be based on the current situation in order to takeadvantage of capital already invested.
They said authorities should review current trends in the auto industry to help it develop in a sustainable way.
Experts said authorities should be cautious when giving too manyincentives to auto makers as they might not increase their localityproportion commitments./.
