A corner of assembly shop at Truong Hai Assembly and Production Company.

HA NOI (Biz Hub) — Truong Hai Corporation, one of the leading automobile manufacturers in Viet Nam, has asked the Government to extend the deadline for paying its import tax bill of more than VND1.2 trillion (US$75 million) from July 1, 2013 to June 30, 2014.

The corporation, which imports completely knocked down parts (CKDs), is being supported by authorities in central Quang Nam Province, where four companies owned by Truong Hai reside (Chu Lai Truong Hai Auto, Truong Hai Bus, Truong Hai – Kia Coach and Vina-Mazda).

According to VnEconomy online newspaper, Quang Nam authorities and Truong Hai Corporation explained that the economic situation in Viet Nam and the declining world markets have led to sales dropping strongly for automobile manufacturers.

It has been reported that the corporation has an inventory worth more than VND3.3 trillion, while it owes about VND5.6 trillion to credit institutions.

Quang Nam called for the Government to support Truong Hai as it is a young domestic manufacturer trying its hardest to become competitive, especially before 2018 when the country is planning to fully join ASEAN Trade Freedom Agreement that will lead to import tax cuts encouraging regional manufacturers to enter the Vietnamese market.

Without investment, the company may collapse, resulting in the loss of thousands of jobs, they warned.

A Finance Ministry leader said the ministry has approved the corporation's proposal and asked the Government for permission to implement the postponement. The corporation will now have to wait for the Prime Minister's approval.

Even with this approval, the extension will only be granted if the corporation can provide a guarantee of support from commercial banks and promises that it will continue investing in automobile manufacturing. Quang Nam People's Committee would be responsible for managing and ensuring the money is used for the right purpose. — VNS