Illustrative image (Source: VNA)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
