According to Viet Nam Customs, more than 71,000 vehicles were imported in 2014. — Photo vtc

HA NOI (Biz Hub) — Suitable incentives were essential to enhancing the competitiveness of enterprises in the support industry to develop the domestic automotive sector, according to Chairman of the Viet Nam Federation of Civil Engineering Association Do Huu Hao.

Hao, who is also former Deputy Minister of Industry and Trade, highlighted the potential to expand the domestic automotive market with its 90 million people.

He stressed the need for the domestic automobile industry to enhance its competitiveness as integration encouraged imports of assembled vehicles in regional countries with zero per cent tariffs.

The most efficient way for local businesses to join the global production chain was to connect with renowned international brands in the support industry, Hao said.

President of the Xuan Kien Automobile Joint Stock Company (Vinaxuki) Bui Ngoc Huyen called for more specific tax and financial incentives. He confidently stated that with the right tax incentives and credit from the State, Vinaxuki could raise its domestic manufacturing rate to 50 per cent and build "Made-in-Viet Nam" passenger cars and trucks for export.

The company had invested more than VND600 billion (US$28 million) in a number of projects to produce automobile spare parts, Huyen said.

They were expected to enhance the competitiveness of Vinaxuki's products in a number of product lines by 2018, including pick-up trucks, cars, taxis and up to 28-seat public vehicles, he added.

Huyen also expressed his hope that incentives would be provided to domestic manufacturers targeting low-income consumers.

In August last year, the Ministry of Industry and Trade introduced a new strategy and plan for the automotive industry, but many of the relevant policies and mechanism are still pending.

At the same time, foreign-invested enterprises in the automobile industry are concerned about their future operations once import tariffs in Southeast Asia are reduced to zero per cent in 2018.

Toyota has said it may stop manufacturing and assembling in Viet Nam and instead import finished products from regional countries.

Many FDI businesses may withdraw from the industry if Viet Nam cannot issue suitable and specific assistance.

According to Viet Nam Customs, more than 71,000 vehicles were imported in 2014, up 102 per cent year on year at the highest rate ever. — VNS