HANOI, May 22 (Xinhua) -- The Vietnamese Ministry of Industry and Trade has admitted the failure of its domestic automobile development plan, because prices of vehicles in Vietnam are still too high and their local content rates are too low.
The Vietnamese automobile industry has still focused on simple assembly, and most of production lines consist of the four key stages of wielding, painting, assembling and checking, daily newspaper Tien Phong (Pioneer) quoted the ministry as saying on Monday.
Meanwhile, selling prices of automobiles in Vietnam are nearly two times higher than those of regional countries as Thailand and Indonesia. High taxes and fees, and small outputs of automobile makers are mainly attributed to the inflated prices.
According to the automobile development plan, the local content rates for cars are expected to stand at 40 percent by 2005, and 60 percent by 2010, but the actual rates are now only 7 to 10 percent on average, compared with the average of 65 to 70 percent in other regional countries.
Vietnam still has to import key materials used for automobile component production such as alloys and high-grade plastic and rubber. Besides, automobile firms in the country have to spend annually 2 billion to 3.5 billion U.S. dollars importing components and spare parts for vehicle production, assembly and repair.
Vietnam spent over 1.8 billion dollars importing automobiles and components for assembly in the first four months of this year, up 3.9 percent against the same period last year, according to the country's General Statistics Office.
