The automobile market will continue to face difficulties in restoring production if the COVID-19 pandemic persists.

The information was part of a document submitted to the Ministry of Planning and Investment by Honda Vietnam CEO Keisuke Tsuruzono recently, in which it reported on the operations of the firm and proposed specific solutions to overcome difficulties due to the COVID-19 pandemic.

“With the possibility of the disease lasting through following years, it might be possible that the business model of automobile manufacturing companies shift from manufacturing to importing,” he said.

Keisuke Tsuruzono said the company’s manufacturing output is expected to drop 30 per cent for cars in 2020 and 43 per cent for motorbikes from April to June. As a result, the company’s revenue would decrease significantly.

The market saw a year-on-year drop of 32 per cent in car sales in the first three months this year. The motorbike market has been affected since early April. The document also mentioned the social distancing order imposed between April 1-22 as one of the reasons for the fall.

According to Tsuruzono, the manufacturing stagnation was partly due to a shortage of spare parts supplied by several nations which were under lockdown due to the COVID-19 pandemic.

In addition, the company had to suspend operation from April 1 to 22 and sale agents suspended business under social distancing measures. Honda Vietnam proposed measures to continue removing difficulties for motorbike and car manufacturers by extending deadlines for their tax and land leasing payments.

The company also made proposals on reducing value-added taxes and registration fees for customers while reducing interest rates by 5-6 per cent for spare parts manufacturers. — VNS