Expectation for the development of Vietnam’s automotive industry

10/05/2022

The Vietnamese automotive industry has always been seen as a priority industry for development, with the expectation of building an increasingly strong Vietnamese automotive industry and making an important contribution to the economy.

Strategic research of the automotive industry according to world trends

On April 21, the Government Office issued Document No. 2506/VPCP-CN communicating the comments of Deputy Prime Minister Le Van Thanh on the proposal of strategic research of the automobile industry according to world trends.

Previously, the Vietnam Automobile Manufacturers Association (VAMA) sent a letter to Deputy Prime Minister Le Van Thanh on the proposal of Vietnam’s Automobile Industry Strategy according to world trends and contributing to the implementation of Vietnam’s commitment at COP26.

In this regard, Deputy Prime Minister Le Van Thanh assigned the Minister of Industry and Trade to meet and discuss the proposals and recommendations of the Vietnam Automobile Manufacturers Association for asynchronous solution to develop the Vietnamese automobile industry according to its assigned functions and tasks; report to the Prime Minister on issues beyond its competence.

Vietnam’s automobile industry development strategy follows world trends and contributes to the implementation of Vietnam’s commitments at COP26.

With the desire to build an increasingly large automotive industry of Vietnam and make a significant contribution to the economy, while also following the technological trends and the transformation of the automotive industry in the world, the VAMA Association proposes to exchange the following contents: The development program of electric cars and the transition from petrol vehicles, oil vehicles to electric vehicles, the action program to implement the COP26 commitment; recommendations on difficulties in the process of implementing the provisions of the Law on Environmental Protection related to end-of-life products and recycling processes; propose policies to promote the market, expand the production of automobiles and auxiliary industries in the country.

Vietnam’s automobile industry has developed quite rapidly in the past 3 years. Domestic manufacturing and assembly enterprises have initially affirmed their role and position in the domestic automobile market and have made strong progress in both quantity and quality.

With sales in March increased 60% compared to February and increased 27% in the first quarter of 2022 compared to the same period last year, automobile enterprises commented that this is a remarkable figure, as the market still faces complex developments of the COVID-19 pandemic and the semiconductor crisis, lack of chips as well as the shortage of supply of components, causing many car manufacturers to have a small impact on production and business activities.

According to statistics from the Department of Industry (Ministry of Industry and Trade), by the end of 2020, Vietnam’s automobile industry has more than 40 enterprises manufacturing and assembling cars including cars, trucks, passenger cars, specialized cars and close-knit cars. Some domestic enterprises have actively participated in the global automobile production chain. Tổng công suất lắp ráp theo thiết kế khoảng 755 nghìn xe/năm, trong đó khu vực có vốn đầu tư nước ngoài chiếm khoảng 35%, doanh nghiệp trong nước chiếm khoảng 65%.

What are the opportunities for Vietnam’s electric car market?

In the face of opportunities and challenges, Vietnam has made long-term strategic solutions for the automotive industry. In particular, in the field of electric cars, the National Assembly and the Government have issued many important decisions, motivating electric cars to reach more people. In particular, the special consumption tax and registration fee for new electric vehicles are adjusted in the direction of reduction and exemption in the first years.

Specifically, the excise tax on electric vehicles with batteries under 9 seats is only 3% from 1/3 of this year and applies within 5 years. Currently, the excise tax on electric cars is applied at 15%, while petrol cars with 9 seats or less are calculated according to the cylinder capacity.

In particular, registration fees for electric cars from 1/3/2022 have been waived (0%) for 3 years according to Decree 10/2022/ND-CP. This is supposed to be a happy signal for the owner of the electric car for at least the next three years.

Over the past few years, a number of domestic automobile enterprises have embarked on technological research to manufacture or plan to bring models from international to Vietnam. Recently, VinFast presented the first EV manufactured by Vietnam itself as VF e34. It is known that the speed of “coming out” of the VF e34 is also on record, taking only 10 months from the time VinFast released the information about the development of its EV.

Pham Tuan Anh, Deputy Director of the Department of Industry (Ministry of Industry and Trade) said that the development of electric vehicles depends on three main pillars (including legal framework, supporting policies of countries; additional incentive measures to protect electric vehicle sales from economic downturn and the number of electric vehicle models expanded and battery price reduced); in which the policy plays a leading role.

With the potential to develop clean electricity sources, Vietnam is the first country in the region to have successful domestic enterprises producing electric cars with external factors and considered as a “golden” opportunity to develop the electric automobile industry. In addition, the technology platform is decades ahead of the world’s development trend, which is a fertile land and has great investment and growth value.

According to experts, this is an appropriate time for domestic enterprises to go off, take the lead, and look for opportunities to transfer to exploit the breakthrough potential of Vietnam’s electric car market to the fullest. Not only bring positive contributions to life, but the use of domestic goods also expresses national pride, and at the same time promotes the development of the domestic economy.

“Vietnam should not be any slower in the electric car game”

The market of electric vehicles in Vietnam is “at the beginning”, there are still many obstacles but according to experts, the trend of shifting from petrol, and oil to electric vehicles is inevitable.

According to Dr Ta Cao Minh, lecturer in Industrial Automation (Hanoi Polytechnic University), in the face of the very strong movement trend of this series globally in the past year, Vietnam should not slow further in the electric car game. In addition, in order to have a basis to promote the development of electric vehicles in Vietnam, according to Mr Minh, it is necessary to improve standards, such as technical requirements and electrical safety with fast charging systems, battery replacement, as well as optimizing charging stations and battery charging locations by using renewable energy sources.

“Electric cars using renewable energy will solve the energy problem of the future. Vietnam needs infrastructure development planning and charging stations to welcome the trend of electric vehicles in progress, “Mr Minh said.

Source: Kinh te Moi truong

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