"Domestic car manufacturers cannot compete with imported cars"

Regarding the time when the import tax on cars will be 0% in 2018, the issue of how Vietnamese car manufacturers will operate, at the 2015 fiscal year business summary ceremony held on the evening of May 22, General Director of Honda Vietnam Company (HVN) Minoru Kato affirmed that HVN as well as businesses in the Association cannot compete with imported cars.

Honda's CR-V model. (Photo: Van Xuyen/Vietnam+)

According to Mr. Minoru Kato, although the tax rate reduction to 0% for completely imported cars from ASEAN countries is very close, so far, support policies for the automobile industry have not been issued.

Meanwhile, to have a new car model, businesses need 2 to 3 years of preparation time, but up to now, businesses have not made a decision for themselves.

Without support policies from the Government, domestic manufacturers will switch to importing cars from Thailand, Indonesia or other markets instead of producing domestically, but this is the worst case scenario and HVN does not want this to happen.

Therefore, for automobile manufacturing and assembly enterprises to continue operating, this depends entirely on the Government's policies. HVN as well as other enterprises in the Association are having specific discussions with the Government on the method of calculating import tax and special consumption tax on automobiles in the coming time.

Mr. Minoru Kato also emphasized that as a business operating in Vietnam for more than 10 years, HVN always wants to continue production, create jobs for workers and contribute to the Vietnamese automobile and motorbike industry.

Reporting on the 2015 fiscal year (April 2014-March 2015), HVN said that total motorcycle production reached 2.71 million units, equivalent to the previous year. However, sales only reached 1.9 million units, down 3% after two consecutive years of decline but still accounting for 70% of the domestic market share.

In particular, by strengthening internal capacity, HVN has increased the localization rate of vehicle models to an average of 95% to serve the domestic and export markets; at the same time, completing the goal of synchronously applying eSP technology on all scooter models.

In fiscal year 2015, HVN exported more than 91,000 complete motorcycles, up 179% over the previous year with a total export turnover of 245 million USD. Export markets include Japan, Europe, North America, Southwest Asia and Africa.

Similar to motorbikes, HVN's automobile segment also achieved record sales of 6,610 vehicles; in which CR-V and City are two key products contributing to HVN achieving this record number.

With the above growth momentum, in fiscal year 2016 (from April 2015 to March 2016), HVN aims to achieve a production output of 2 million motorbikes; introduce 10 new upgraded motorbike models to the market; strive to achieve a motorbike export turnover of 345 million USD, an increase of 41% compared to fiscal year 2015./.

According to VietNam plus