Record output of domestically produced cars
According to the latest data from the General Statistics Office, the motor vehicle production index in November 2024 is estimated to increase by 2.5% compared to October 2024 and increase by 36.2% compared to November 2023. In the first 11 months of 2024, the motor vehicle production index increased by 18.3% compared to the same period in 2023 (higher than the 14% growth rate in the first 10 months of 2024).
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| Tax incentives in general and the Automobile Support Industry Tax Incentive Program in particular play an important role in promoting the development of the automobile industry. Photo: Thaco Truong Hai |
The report also showed that in November 2024, Vietnam produced and assembled an estimated 47.3 thousand cars, up 3% compared to September 2024 and up 47.8% compared to October 2023. Thus, domestic car production has had its 8th month of growth since the beginning of 2024 and the 6th consecutive increase.
This is also the month with the highest output since the beginning of 2024. The continuous growth momentum helped the total domestic automobile production output in the first 10 months of 2024 reach 336.5 thousand cars, an increase of 22.4% over the same period in 2023. This growth rate has improved compared to the increase of 15.8% in the first 10 months of 2023.
In general, in the 11 months of 2024, the output of the auto parts and components product group increased quite well compared to the same period in 2023, specifically: Other spare parts of motor vehicles increased by 24.55%; other equipment used for motor vehicle engines increased by 5.88%; ignition wire sets and other wire sets used for motor vehicles increased by 5.79%. Regarding automobile production, there were only 2 classifications: vehicles with compression-ignition piston engines carrying 10 or more people with a total weight of over 6 tons and under 18 tons with an output increase of 33.51% and vehicles with engines carrying less than 10 people, with spark-ignition piston engines with a cylinder capacity of over 1500 cc and ≤ 3000 cc increased by 31.46%. The remaining output of other types of automobiles decreased slightly by about 3-7%.
According to auto market experts, domestic manufacturers increased production sharply in November because this was the last month of the Government's 50% reduction in registration fees, lasting for three months, September, October and November. At the same time, November is also the "golden" time to prepare supply for the peak period of the auto market during the Lunar New Year.
Effectiveness of the Automobile Support Industry Tax Incentive Program
According to the Department of Industry (Ministry of Industry and Trade), in recent times, tax incentives in general and the Automobile Support Industry Tax Incentive Program in particular have played an important role in promoting the development of the automobile industry.
“ The domestic automobile market has grown well, the production scale has been constantly expanding, in particular, some domestically produced and assembled electric vehicles have grown rapidly. The localization rate of some commercial vehicle lines is relatively high, and a number of automobile products and automobile components have been exported to many regional and international markets. At the same time, a number of strong domestic automobile brands have been formed; attracting investment and expanding production in the automobile industry ” - the Department of Industry acknowledged.
Since the issuance of the Automotive Support Industry Tax Incentive Program, according to the assessment of the Vietnam Mechanical Association (VAMI), member enterprises have recognized certain effectiveness that the program brings through the application of a preferential import tax rate of 0% for raw materials, supplies, components for manufacturing and assembling supporting industrial products. This is the basis for enterprises to feel secure in stabilizing production and business, expanding production scale, investing in new machinery, equipment, modern technology, improving productivity, participating deeply in the value chain of the global automotive industry, gradually affirming the development of the domestic automotive support industry.
The effectiveness of the Automobile Supporting Industry Tax Incentive Program is clearly demonstrated through impressive figures. As of May 31, 2024, participating enterprises have produced more than 3.3 million products, with a total tax refund of up to VND 116.8 billion. The tax refunded in 2021 - 2023 and the first 5 months of 2024 is VND 2.44 billion; VND 66.56 billion; VND 36.98 billion; VND 10.86 billion, respectively. On average, the tax refunded each year is about VND 39 billion.
Customs departments in Bac Ninh, Hanoi, Hai Phong, Quang Nam, Ha Nam Ninh and Binh Phuoc have implemented 7 incentive periods, recording the participation of 17 typical enterprises. According to the Ministry of Industry and Trade, the country currently has 38 automobile manufacturing and assembling enterprises meeting the standards under Decree 116/2017 and about 410 enterprises participating in the production of automobile supporting industries with more than 1,229 products manufactured.
VAMI highly appreciates the effectiveness of this policy. According to VAMI, the 0% import tax on raw materials and components for supporting industrial production has helped businesses stabilize production, improve competitiveness and invest heavily in modern technology.
The results of the program will continue to motivate the Vietnamese automobile industry to affirm its position, not only domestically but also on the global industrial map.
Since 2020, the Ministry of Industry and Trade has granted Certificates of Incentives to about 40 projects producing supporting industrial products for the automobile manufacturing and assembly industry in the List of priority supporting industrial products for development. Tax incentives are an important lever, helping businesses confidently expand their scale, improve equipment, and gradually participate deeply in the global value chain of the automobile industry.
In order to implement the policy on developing the supporting industry, the Government issued Decree 57/2020/ND-CP, which added the Tax Incentive Program for the Automobile Supporting Industry (now Article 9 of Decree 26/2023/ND-CP). The program will be implemented until December 31, 2024.
To date, the implementation period of the automobile support industry tax incentive program has nearly ended, while the tax incentive program for automobile production and assembly (issued before this program) has been extended once until the end of 2027.
The Ministry of Finance is seeking comments on the draft Decree to adjust tax rates, list of goods and taxes related to import-export activities in Article 9 of Decree 26/2023/ND-CP. In particular, the management agency proposes to extend the tax incentive program for automobile supporting industries until December 31, 2027.
According to the Ministry of Industry and Trade, in the automobile industry development strategy, Vietnam aims that by 2030, the supporting industry will meet about 55-60% of the demand for components and spare parts for domestic automobile production and assembly and reach 80-85% by 2045. This reflects the Government's determination to sustainably develop the supporting industry, while enhancing self-reliance in automobile production and reducing dependence on imported components.
To achieve the above goals, the Vietnamese auto supporting industry will continue to promote the application of advanced technology in the manufacture of important parts and components such as transmissions, gearboxes, engines, car bodies, etc. At the same time, domestic enterprises will need to strengthen cooperation with large auto corporations, choosing types of spare parts and components that can be produced domestically, thereby taking on an important role in the global supply chain.
According to the Ministry of Finance, the implementation of tax incentives for the automobile manufacturing and assembly industry, including tax incentives for supporting industries, shows that these policies have really contributed to the development of the domestic automobile manufacturing and assembly industry. This policy also encourages businesses to continue investing and expanding automobile production and assembly instead of importing complete automobiles from ASEAN with a 0% import tax rate, thereby creating a driving force that spreads to consumers and businesses that produce auxiliary products for the automobile industry such as repair, warranty, maintenance, etc. At the same time, it also creates important infrastructure for the development of the electric automobile manufacturing and assembly industry. |
Source: https://congthuong.vn/them-tro-luc-cho-o-to-lap-rap-trong-nuoc-367963.html
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