failed to live up to expectations because of a limited market, supply
industries and roading, an expert has said.
"
Vietnam is a developing market with a very limited size, but it has 11
joint venture companies with a production capacity of just thousands of
vehicles per year. How can it be effective?" senior independent
economic commentator Pham Chi Lan said.
As a result,
domestic vehicle makers like Vinaxuki and Truong Hai Auto struggled to
compete against foreign enterprises who had more advantages, she said.
Ministry of Industry and Trade heavy industry
department deputy Ngo Van Tru said the domestic auto consumption of just
100,000 vehicles with 400 models per year was hardly enough to support
the industry.
Lan said countries like Japan and
China had several auto producers, but they were able to create healthy
competition and to meet demand.
The sluggish
development of domestic auxiliary industries didn't help the situation.
Carmakers had to import components and parts, which pushed up prices and
made them less competitive.
Lan said most local
carmakers did not trust the quality of components and parts made in
Vietnam . Enterprises, on the other hand, considered it too risky to
produce components and parts in Vietnam .
Hanoi
Export Processing and Industrial Zone management board head Nguyen Xuan
Chinh said one of main reasons auxiliary industries hadn't developed was
that auxiliary enterprises and auto assembling companies did not trust
each other.
A representative of Vinaxuki, who asked
to remain anonymous, said: "Vinaxuki produces 40 percent of its own
components and parts. We plan to raise that to 60 percent."
Meanwhile, another fact against the development of the car industry was the nation's poor roading.
Main roads in Hanoi and HCM City , for example, could
adequately accommodate only 15 percent of all vehicles, instead of the
standard 40-60 percent. The density of vehicles per kilometre in Hanoi
was 6,500, including motorbikes.
The sources said authorities should give tax incentives to encourage domestic auto production by a certain deadline.
Economist Lan said: "Auxiliary enterprises should produce components
and parts for many different vehicles, which would help them save
production costs and human resources."
The
Government should encourage local firms to produce autos which satisfied
the demands of motorbikes and made the vehicles more competitive with
foreign one, Lan said./.
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