Illustrative image (Source: VNA)Hanoi(VNA) – Thanh Cong Group on March 30 signed a cooperation agreement with theRepublic of Korea’s Hyundai Motor Company on forming a venture to expand the assemblingof automobiles in Vietnam.
Le Ngoc Duc,Director General of Hyundai Thanh Cong company under Thanh Cong Group, saidHyundai Motor decided to choose Thanh Cong as its partner in the region basedon the group’s achievements in the past years.
The venture isalso part of Hyundai Motor’s strategy in expanding its global production base, withASEAN as a potential market.
It is noteworthythat the decision is made at a time when the deadline is approaching (2018) forthe reduction of import tariffs on completely-built-units (CPU) from ASEANcountries to zero, under the ASEAN Trade in Goods Agreement (ATIGA).
According toDuc, this is a chance for Thanh Cong Group to develop the local supportindustry, a move in line with the development strategy for the auto industry approvedby the Government.
In the initialphase, the Hyundai – Thanh Cong Joint Venture will maintain the current factorywith a capacity of 40,000 vehicles per year in Ninh Binh province and invest inexpanding it in the near future, using up-to-date technologies of Huyndaigroup.
With the jointventure, the rate of completely knocked down (CKD) vehicles among Hyundaiproducts available in Vietnam will be raised from 20 percent to 80 percent inthe latter half of 2017 and 90 percent in 2018.
Hyundai ThanhCong also aims for a localisation rate of 40 percent to be eligible for thezero percent tariff rate when exporting its vehicles to other ASEAN countries.-VNA
