Increase “assistance” so that the auto support industry “promotes”

Vietnam’s auto support industry has only produced less than 300 parts and assemblies out of about 30,000 components of a vehicle.

Localization rate “modest”

According to the Ministry of Industry and Trade , there are currently about 300 automobile supporting industry enterprises nationwide with the participation of enterprises of all economic sectors, of which notable contributions are made by a number of domestic private enterprises. , but up to 80% are foreign enterprises, most of the rest are small-scale, difficult to access capital, difficult to invest in technology, and the linkage between these enterprises is still quite weak.

The Ministry of Industry and Trade will continue to drastically and effectively implement the Supporting Industry Development Program to gradually improve the capacity of industrial enterprises and supporting industries.

Regarding the localization rate, the Ministry of Industry and Trade said that the localization rate for personal cars up to 9 seats is still low. The set target is 30-40% in 2020, 40-45% in 2025 and 50-55% in 2030, but so far it has only reached 7-10% on average, of which Thaco reached 15-18 %, Toyota Vietnam reached 37% for the Innova model alone (information provided from the business side), much lower than the set target as well as much lower than other countries in the region such as: Thailand, Indonesia and Malaysia.

The Vietnam Automobile Manufacturers Association (VAMA) also pointed out that the low production of domestically produced components makes the production and assembly costs of vehicles in Vietnam 10-20% higher, and the selling price of the vehicle is higher. about 20% higher than other countries in the region.

Vietnamese enterprises mainly produce simple products such as windshield tape, energy consumption labels, registration stamps, fuel stamps, fuel pipes, water tank covers, and tires. tubes, wires, rear license plate gaskets, fenders, seats, bumpers, batteries, rims, exhaust pipes, air conditioners… “ Only a few businesses invest in body stamping and tire stamping lines. and this list does not contain important details about the engine, transmission, transmission, safety system and many electronic systems on the vehicle “- a VAMA representative specifically stated.

Besides, auto parts currently produced in Vietnam are mainly labor-intensive parts with simple technology, such as seats, glasses, tires, wheels… Vietnam has to import. net most groups of supporting industry products with high technology content and added value, especially important parts and components, belonging to brake, clutch, gearbox, steering system, high demand for manufacturing technology.

Focus on solutions to increase internalization rate

For the auto industry, in order to help domestic automobile assemblers increase the localization rate, improve competitiveness and promote the development of supporting industries, one of the solutions is to repair amendments to the Law on Special Consumption Tax.

Regarding this content, Mr. Pham Van Tai – General Director of Truong Hai Automobile Joint Stock Company (Thaco) suggested that the Government consider submitting to the National Assembly for amendments to the Law on Special Consumption Tax. In which the special value tax calculation price for domestically produced cars is calculated in the following direction: The value of domestic production (ie the localization rate) is deducted from the excise tax price.

Pham Tuan Anh, Deputy Director of the Department of Industry (Ministry of Industry and Trade), said that regarding tax policy, consider adjusting the excise tax on domestically produced cars and maintaining the import tax rate on imported components. Spare parts cannot be produced.

Referring to countries in the region and around the world when developing and implementing policies to encourage the development of supporting industries for the automotive industry, the Ministry of Industry and Trade believes that Vietnam can learn from The success of the Thai auto industry begins with building an overall strategy and concentrating resources. The establishment of a supporting industry network for a strong automotive industry with high technology has facilitated the rapid development of the Thai auto industry.

In order to improve the qualifications and capacity of supporting industry enterprises, the Ministry of Industry and Trade pointed out that it is necessary to allocate capital for capital construction to build physical foundations to form at least 3 development support centers. developing supporting industries in 3 regions for priority supporting industries.

These Centers have the role of technical centers and shared machines, providing testing, measurement, inspection, product quality certification, consulting, and technology transfer services to customers. supporting industrial enterprises. Including industrial enterprises supporting the automotive industry and business improvement services.

At the same time, allocating sufficient funds to effectively implement contents to support domestic supporting industry enterprises. It is necessary to develop preferential credit packages for the development of priority industries, including the supporting industry of the automobile industry, with a term of up to 2025. Enhance the role and encouragement of localities in construction own supporting industry development policies and programs, with emphasis on supporting industries for the automotive industry.

In addition, attracting investment in developing supporting industries for the automobile industry. Attract investment from manufacturers of finished products and suppliers of major components and assemblies in the automotive industry in the world, especially multinational enterprises investing in Vietnam with the goal of serving customers. serving the domestic market and the ASEAN market rather than being export-oriented, serving the global market. There are specific preferential and support policies to encourage large export processing enterprises to sell in the country, seek opportunities in the domestic market and develop the supply chain of the automotive industry in Vietnam.

“On the other hand, promoting large projects in the material industry, especially projects to produce hot rolled steel, fabricated steel… of domestic investors to ensure the source of input materials for automotive industry support. Attract investment in basic manufacturing sub-sectors (forming, pressure machining, precision machining, heat treatment, surface treatment and mold manufacturing). Promote cooperation with industries of input materials for the production of components and spare parts for the auto industry…” – emphasized the Ministry of Industry and Trade.

To achieve the goal of developing the supporting industry for the auto industry, economic expert Dr. Vu Dinh Anh said that it is necessary to have specific policies to increase the internalization rate of the mechanical industry and increase the value of domestic production. For example, the Vietnamese auto industry needs to move towards a higher value-added chain. “ It is urgent to turn the proposal into action. This is the only way to develop the supporting industry for the auto industry in Vietnam with real change ” – economist Dr. Vu Dinh Anh proposed the solution.

Source Cong thuong