The Ministry of Industry and Trade is seeking opinions on the automobile industry development strategy until 2030, with a vision to 2045, with the goal of the Vietnamese automobile market growing by 14 - 165% per year, reaching a consumption of 1 - 1.1 million units by 2030.
In recent years, automobile production and consumption output has only been around 300,000 to more than 400,000 vehicles per year.
Therefore, creating a large enough market capacity is a necessary factor to promote consumption in the automobile industry. To do so, the products of the industry automotive industry must meet market demand and have reasonable prices.
In fact, before being put on the road, each car must pay taxes and fees such as: import tax, value added tax (VAT), special consumption tax (SCT), corporate income tax (CIT), registration fee, registration fee, inspection fee, road fee and insurance fee. These costs from taxes and fees account for a large proportion of the car price.
Reducing car prices requires many comprehensive policies. That is, local authorities where car dealerships are located need to support businesses to reduce land rental costs, reduce personal income tax and other costs. As the business and service systems develop, the automobile market will also expand.
For pure electric vehicles (abbreviated as electric vehicles - Pure electric vehicles) and plug-in hybrid vehicles (Pluh-in Hybrid vehicles), it is necessary to exempt all excise tax, VAT and registration fee If these taxes and fees have not been fully reduced in the domestic localization rate category.
For automobile products or assemblies (including engines, frames, cockpits, bodies, etc.), exported auto parts need a policy so that manufacturers can receive a refund from the Government, about 5 - 10% of the FOB (Free On Board) price depending on the product type of each export order.
Developing the auto support industry will also help reduce the cost of car production. Therefore, it is necessary to establish and operate auto support industrial clusters located in localities with advantages.
For example, the supporting industrial cluster in Hai Phong serves businesses such as: VinFast, Ford... (Hai Duong), Jaecoo & Omoda and Lynk&Co & Geely (Thai Binh), VAD Automobile, Vinacomin Automobile (Quang Ninh), MAZ Automobile and TMT Automobile (Hung Yen).
The production cluster in Vinh Phuc serves Toyota, Honda, Daewoo, SRM (Bac Ninh) and Hino (Hanoi). The production cluster in Ninh Binh serves Hyundai Thanh Cong and VEAM (Thanh Hoa).
The production cluster in Tam Ky (Quang Nam) serves THACO, TCIE (Da Nang), Kim Long Auto and Haeco (Thua Thien Hue). The production cluster in Ho Chi Minh City serves Mercedes-Benz, Mitsubishi, SAMCO, Isuzu, Tracomeco, Suzuki...
To develop automobile support industrial clusters, it is first necessary to develop a roadmap to reduce special consumption tax, VAT and registration fees according to the localization rate (calculated by value).
For example, for cars with a localization rate of 40% or more, these tax rates should be applied at 0% to encourage businesses to use domestic components, contributing to the development of the automobile support industry.
With a localization rate of 40% or more, automobiles manufactured and assembled in Vietnam when exported to markets of countries in the free trade agreements ATIGA, RCEP and CPTPP will also increase their competitiveness, due to enjoying a 0% import tax rate.
In addition, there should be a policy of free technology transfer, import tax and VAT exemption for equipment at auto supporting industry factories. Localities should also have a support package for auto supporting industry enterprises located in the area.
For example, exempting or reducing land rent for 5-10 years, supporting human resource training, supporting or leasing low-cost housing for officials and workers; exempting or reducing corporate income tax and personal income tax for automobile support industry enterprises.
In the long run, to develop automotive industry It is necessary to build a national agency specializing in research and development of Vietnam's automobile industry.
This agency will research and develop the automobile industry in stages, automobile products, components, and spare parts suitable for the market; research and develop techniques and technologies in the supporting industry and automobile assembly. From there, propose to the Government policies to develop the automobile industry in a sustainable and long-term manner.
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