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Vietnam Today

Automobile demand may reach 600,000 by 2025

Released at: 17:46, 12/10/2017

Automobile demand may reach 600,000 by 2025

Photo: Hai Van

Enterprises must link together to bolster local production and cut imports into the future, conference hears.

by Hai Van

Annual demand for automobiles in Vietnam may stand at 600,000 units by 2025, the Ministry of Industry and Trade (MoIT) told a conference on the automobile industry and opportunities for manufacturing development in Vietnam on October 12.

A representative from MoIT forecast that the period from 2020 to 2025 will be boom time for automobiles in Vietnam, with demand at some 600,000. It is therefore necessary to develop the domestic automobile industry to reduce imports. If domestic automobile manufacturing can meet demand, especially in vehicles of less than nine seats, import turnover will be cut by $3-7 billion in 2025 and $5-12 billion in 2030.

This would contribute to improving Vietnam’s trade balance and macroeconomic stability.

The domestic automobile sector, however, faces a host of difficulties, including tough competition, especially after 2018, when taxes on automobiles imported from ASEAN come down to 0 per cent.

In order to reach government targets, manufacturers and enterprises must link together and cooperate to develop the sector.

To promote the development of the automobile industry and promptly issue practical policies, MoIT expects to cooperate with enterprises to bolster links between manufacturing and assembling enterprises and those manufacturing components, with support from the government through the program to develop support industries, which has been approved by the Prime Minister.

As at the end of 2016, there were about 176 automobile manufacturing and assembling enterprises in Vietnam, with a total capacity of about 500,000 units per year.

Large brands include Truong Hai (Thaco), Toyota, Hyundai, Honda, Chevrolet, Ford, Mitsubishi, and Nissan, which meet about 70 per cent of demand for vehicles of less than nine seats.

Many have developed their capacity, such as Thaco and Hyundai Thanh Cong.

“We have to cooperate through using products from Vietnamese enterprises to boost the domestic automobile sector in the time to come,” Mr. Pham Van Tai, Deputy Director of Thaco, said on the sidelines of the conference.

Many opinions were expressed by enterprises and authorities on the status of the industry and solutions to resolve problems. Calls were made to boost the automobile industry and the related support industry.

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