Thursday, 29 June 2017 17:16

    Auto firms ask to lower component import taxes

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    High import taxes on auto components and parts, packaging and logistics expenses are major reasons behind locally-assembled cars costing 10-20 per cent higher than imports from Thailand and Indonesia.

    As such, these are also factors hindering growth of the domestic automobile industry, the automobile working group said at the Vietnam Business Forum (VBF) 2017 recently.

    At the forum, a meeting between the Vietnamese Government and the business community held in Hà Nội, the group said higher prices made local automakers less competitive than imports from ASEAN members, and the situation will worsen when import taxes drop to zero per cent in the region next year.

    Sumito Ishii, general director of General Motors Việt Nam and head of the VBF automobile working group, said major automakers and auto part suppliers felt the local automobile industry was operating on a small scale, so it had not attracted the participation of sufficient global part suppliers.

    “The global suppliers will not invest if there is no clear business plan – whether automakers maintain or raise production in Việt Nam or not,” Ishii said.

    Of the current part suppliers in Việt Nam, more than 90 per cent are foreign-invested businesses, and the majority of auto components, parts and materials are imported.

    To help expand domestic auto production, the Government team currently in charge of the automobile industry should have auto assemblers and part suppliers participate in the process so they can understand the industry’s current situation better, the group said.

    The team should organise monthly conferences to discuss policy drafts for the industry and keep the Prime Minister informed.

    Policy makers should also continue working with businesses to build measures that will help cut production costs, reducing the pressure of competition on local automakers from 2018. Programmes have to be developed to connect businesses in the sector.

    “The connection between foreign investment businesses and domestic businesses is ineffective because there is no available database relevant to domestic parts and component suppliers. If we have a database, businesses can compare and contact local part suppliers easily,” Ishii said.

    He said foreign investment businesses should provide the list of auto parts and components that need to be localised with more details so as to help local suppliers prepare the necessary technologies.

    Meanwhile, local part suppliers would need to focus on meeting production demands, including quality, costs and delivery, and step up co-operation with foreign suppliers.

    "As for the automobile industry, the top priority is to build up a sustainable growth market. Relevant long-term, stable policies are needed to help businesses set up their plans," Ishii said.

    Read 83 times Last modified on Thursday, 29 June 2017 17:20

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