With Chinese brands rapidly expanding in the Vietnamese market, experts are calling for protective policies to safeguard local manufacturers and ensure the country’s long-term industrial growth.

Despite a later start than other regional countries such as Thailand, Indonesia and Malaysia, Vietnam has established itself as a formidable rival in the automobile market.

The Vietnamese government has finalized a decision to halve registration fees for locally produced cars for the remainder of 2024.

The Ministry of Finance has raised concerns about the potential risks of reducing registration fees for domestically produced cars, highlighting the possibility of violating international commitments.

Although the Ministry of Finance (MOF) has proposed cutting the vehicle registration tax by 50 percent, it is worried about the implementation of international commitments.

Vietnam is highly committed to transforming towards green practices across various industries, including the car industry.

There is currently no national standard for emissions for electric and hybrid vehicles in Vietnam, which has hindered many manufacturers from producing or importing these vehicles.

The Vietnam Motor Show (VMS), the largest playground for the automotive industry in Vietnam, will return in October this year after a one-year hiatus due to difficult economic conditions, bringing together many global brands.

More than 30% of Vietnamese consumers are interested in purchasing electric vehicles (EVs), according to a recent Deloitte’s global automotive consumer study.

Vietnam has made efforts to build a strong domestic automobile industry with a view to becoming an exporter. However, the young industry faces many challenges, especially in implementing FTAs.

The price of mini car models available in Vietnam remain high, limiting the number of purchases. If the prices were halved, however, sales would increase.

Prime Minister Pham Minh Chinh has told the Ministry of Finance to prepare and send a vehicle registration fee reduction plan to the Government by May.

The strategy should also aim to increase the market share of domestically produced automobile products gradually, with the intent to replace imported products.

Reuters has quoted its source from Phu Ha Industrial Zone(IZ) in Phu Tho province as reporting that BYD, the large automobile manufacturer from China, has postponed its plan to build an EV (electric vehicle) factory in Vietnam.

It is necessary to study proposals from experts and businesses to have more practical policies for electric vehicles, particularly hybrid vehicles.

2023 was a tough year for automobile manufacturers as demand was weak despite considerable price decreases. However, there was good news that marked an important milestone of the industry.

Proposals by Toyota and Ford about tax incentives have not received support from the Ministry of Finance (MOF) which says there are already many policies to support the domestic automobile assembling and manufacturing.

The Ministry of Finance has declined to support proposals put forth by Toyota and Ford to relax regulations and include certain auto parts in the list of items eligible for a 0% tax rate.

Facilitating the transition to electrified vehicles in VN, State management bodies must put forth preferential policies, development strategies and initiatives to encourage adoption by users, according to experts.