Vietnam Switches Focus to Support Industries

Vietnam Switches Focus to Support Industries 

Vietnam hopes to call more investment to support industries, which are necessary to develop automotive, electronic, textile and garment production to facilitate the master plan due this September.

The Ministry of Industry (MoI) is drafting the master plan for increased development of support industries, in an effort to place special attention on the issue.

The plan will outline an overall picture of Vietnam’s support industries, especially in production of automobiles and motorcycles, electronics, garments and textiles, according to Phan Dang Tuat, General Director of the Institute for Industry Policy and Strategy under the MoI.

Specific tax preference policies, relating to land lease, tax incentives and credit will also be elaborated for enterprises that decide to invest in spare parts production.

He said that the total capacity of support industries currently meets just 15-20 per cent of demand from production in the automotive field and other sectors. The auto manufacturers, for example, currently need to import 85-90 per cent of car parts for local assembling, thus making the production cost higher than that in other regional countries.

The local content ratio of the auto industry is very low, at 10 per cent only. Toyota Vietnam is an exception with 15 per cent of parts made locally. In the apparel and electronics industries the local content of products is 35 per cent and 30 per cent respectively.

With clear policies toward encouraging investment in support industries to be outlined in the master plan, investors will soon have adequate foundations to decide on opportunities.

Vietnam hopes to lure more investment to this area in the future by developing suitable encouragement policies, Mr Tuat said.

Support industries are a pressing issue these days. They will also be the main theme of the ‘Vietnam AutoExpo 2005’, which will be held on July 20-24.

According to organiser CIS Vietnam Trade Fair and Advertising Company; Russian, ROK, Japanese, Chinese and other regional enterprises have registered to attend the exhibition.

In addition, locally produced trucks will be on display, including KAMAZ vehicles produced by the Vietnam Coal Corporation, and the FOTON series by Truong Hai Automobile Company, which are both priced at around half the cost of similar vehicles.

VietNamNet