|Customers examine a four-seat car on display in this file photo. Some experts and government units have voiced concern over the future growth prospects of the local automobile sector due to the upsurge in car imports
Statistics from the Ministry of Industry and Trade indicate that in the first six months of the year, the volume of automobile imports reached a record high of over 75,430 units, worth US$1.68 billion, skyrocketing 513% in volume and 413.4% in value year-on-year, the local media reported.
The strong rise was attributable to the automobile import tariff in the ASEAN region being slashed to zero.
The number of automobile imports is forecast to continue rising in the coming years, increasing pressure on the local automobile sector.
Speaking at the seminar titled “Steps forward for supporting industries in Vietnam,” Vu Tan Cong, an automobile expert, said that the Vietnamese automobile sector could soon succumb to heavy competition from foreign manufacturers if the status quo remains unchanged.
Cong reported that the cost of automobile production in Vietnam is 18%-20% higher than in other countries, making it difficult for the domestic automobile industry to compete with foreign rivals.
The Government should adopt supporting programs and preferential tax policies to ensure the stable development of the local automobile industry, Cong suggested.
Besides this, domestic automobile firms should seize more opportunities in the local market and diversify consumption markets to escape this problem.
Apart from this, the ministry’s report revealed that in Vietnam, supporting industries for automobile manufacturing remain weak.
Only a few suppliers of automotive supporting industries are able to join the supply chains of automobile manufacturers and assemblers in Vietnam, the ministry said.
Meanwhile, Thailand has some 700 suppliers for auto parts and 1,700 supporting companies, contributing to the strong growth of its automobile industry.
The quality of imported cars is controlled more closely than that of domestic automobiles, raising customers’ confidence in foreign cars, the ministry noted in its recent report to the prime minister.
The selling prices of vehicles in Vietnam are higher than those in the region, whereas the quality of locally assembled cars is lower than that of imported cars, according to a report from the Heavy Industry Department, under the Ministry of Industry and Trade.
The ministry explained that the country’s automobile manufacturing sector would have a gloomy future if the quality of cars they produce is not enhanced and the prices of cars they sell are not lowered.