ˇˇˇˇHANOI, Sept. 30 (Xinhuanet,by Huang Haimin Thai Thanh Van ) --Vietnam's fledgling auto industry has been
making efforts to "take off" after 10 years of still slowdevelopment, aiming to
make greater contribution to the cause of modernization and industrialization of
the country.
ˇˇˇˇUp to now, Vietnam's auto industry with 11 foreign manufacturers have made
their marks in the local market. The registered investment capital of these
manufacturers is over 543 million US dollars, of which 326 million dollars have
been disbursed. Manufacturing capacity totals nearly 149,000 units per year
spread across a total of 55 brands.
ˇˇˇˇThe 11 automobile joint ventures manufactured 2,163 cars in August, a 21.2
percent increase over the same period last year, according to Vietnam Automobile
Manufacturing Association (VAMA).
ˇˇˇˇThe firms made 15,979 cars in the first eight months of this year, about a
25.3 percent increase over the same period last year.It is expected to consume
some 25,000 units this year, a slight increase from 20,000 in 2001, 14,000 in
2000, and 7,000 in 1999, VAMA's figures showed.
ˇˇˇˇIndustry insiders attribute the increase in the total car salesto an
increase in the number of consumers, including new enterprises.
ˇˇˇˇVietnam's auto industry firstly targeted to meet and keep up with domestic
demand in the main categories of vehicles whilst decreasing its reliance on
imported components. It will then, step-by-step, look to export parts,
components and non-luxury vehicles to other countries.
ˇˇˇˇHowever, in the development process, the country's automotive manufacturers
are facing challenges in terms of competitive environment, technology
advancement and localization.
ˇˇˇˇAt present, car manufacturers dare not expand production capacity with the
volume of vehicles being imported continuing to rise, due to the inconsistent
policies of the government, noted local experts.
ˇˇˇˇThe local car market is too tiny compared with other countries in the
region due to Vietnam's low income per capita at around 420US dollars annually,
which is much far from the level of 1,000 US dollars to ensure that the
automobile market can develop and sustain itself.
ˇˇˇˇHowever, car prices, the fees of telecommunication and transport, and tax
in Vietnam are often higher than those in othercountries.
ˇˇˇˇIn addition, car output of the automobile enterprises is not sufficient to
ensure profitable production, accounting for just about 15 percent of the
production capacity. The auto industry hasseen not only low production and sale
but also monotonous categories and models.
ˇˇˇˇWith an aim to boost the car production and sale, Vietnam is considering
several policies to foster the indigenous automobile industry, including a
localization policy in 2003, imposing importduties depending on local content,
and establishing local manufacturers for non-luxury and special use vehicles.
ˇˇˇˇMeanwhile, it has also worked out a plan to establish an industry
manufacturing low-cost cars for the domestic market usinginexpensive imported
parts.
ˇˇˇˇAccording to experts, for the short term, it may be more efficient for
Vietnam to focus on the manufacture of agricultural vehicles in order to meet
demand in rural areas.
ˇˇˇˇBut, agricultural vehicles are considered to have little exportpotential,
and expectations of a rising demand from the middle-class urban population for
private cars over the next 10 to 20 years suggest considerable benefits could be
had from a more localized auto manufacturing industry.
ˇˇˇˇIf the country is to supply more locally produced parts and completed
vehicles for both its home and neighboring markets within 20 years, Vietnam must
focus now on developing an industry which can make products to international
standards, said an official from the Vietnamese Ministry of Industry. Enditem
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