Local auto firms work together 

These companies, including the Vietnam Engine and Agricultural Machinery Corporation (VEAM), Vietnam Motor Industry Corporation (Vinamotor), Saigon Transportation Mechanical Corporation (SAMCO), THACO Group, Xuan Kien Automobile JSC (Vinaxuki), Z179 Factory under the Ministry of National Defense and Vietnam Mechanics Development Consultancy Centre (MDC), control much of the major production and assembly capability in Vietnam and are members of the Vietnam Association of Mechanical Industry (VAMI).

They have agreed to set up the Automobile Department under VAMI in order to help local producers to produce and assemble automobiles and foster local supporting industries. 

Dao Phan Long, VAMI’s general secretary and vice chairman, said the group plans to focus on four fields: trucks, passenger vehicles, sepecialised vehicles and four-seat cars.

“Domestic production could meet half Vietnam's demand, and we get the added advantage of kick starting the domestic auto industry," said Long.

Bui Ngoc Huyen, general director if Vinaxuki, said, “This cooperation proves our determination to increase the capacity of local auto industry.”

Huyen went on to say that local auto firms are facing fierce competition from FDI firms, as they lack capital, experience in branding and access to technology. Meanwhile, FDI firms are provided with numerous incentives.

“In order to support local producers, I’ve proposed cutting down the special consumption tax for cars to 50% if local car production meets half the demand. Even though the Ministry of Industry and Trade agreed, the Ministry of Finance did not,” he said.

He added that with a population of nearly 100 million, domestic auto demand will be on the rise; however, it’s important to work out more incentive policies for local production.