Vietnam Denies New Investment in Auto Industry
The Vietnamese Government has called a temporary halt to licensing auto projects after discovering local administrations are keen on such projects though many investors lacked the funds or technology needed.
The Ministry of Industry on January 22 asked the People’s Committees in provinces and cities across the country to delay licensing after an investigation last year found that only 13 of 34 new automakers conformed to its guidelines.
Another study last year showed that the majority of enterprises applying for auto licenses had modest capital, backward technologies, and low manufacturing outputs, with capacities ranging between 3,000 and 5,000 cars a year.
Nevertheless, many provinces and cities were encouraging investment in automobile assembly, the ministry said, adding that this needed to be curbed.
A government plan for the auto industry for 2010-20 approved by the Prime Minister projects domestic demand of just 113,000 vehicles by 2010.
But installed capacity would hit 120,000 by then, the ministry warned.
Around 200 firms are involved in the manufacture, assembly, and repair of automobiles, 90 of them in production and assembly.
However, none of them has invested in producing vehicle parts like engines, chassis, or bodies as a result of which several billions of dollars worth components are imported every year.
New Hanoi, Youth
Vietnamese
