The Ministry of Science and Technology in mid-August just enacted a circular to rescind current regulations on methods to calculate the automobile localization ratio in Vietnam. The new circular will take effect from October 1 this year.
Under the current regulations, Vietnam calculates the automobile localization ratio by clusters of components produced in the country. Meanwhile, other countries calculate this as a percentage of domestic production value.
Vietnam's automobile industry remains a fledgling one after more than 30 years since the country opened its door to foreign investment.
The current average localization ratio of passenger cars with up to nine seats is as low as 7-10%. It failed to meet the Government’s target of 30-40% by 2020, 40-45% by 2025 and 50-55% by 2030.
Automotive experts said the abolition of these regulations is in line with the development and change of technological processes of automobile production and assembly in the country and the world to ensure transparency. The abolition will also help meet international standards./.
