Vietnam Prime Minister Nguyen Xuan Phuc emphasised that development of the domestic automobile industry is necessary to achieve a self-reliant economy, during a meeting to discuss development of the country’s automotive sector. PM Phuc states that the government aims to increase localisation rate in automotive manufacturing and apply modern technologies during manufacturing processes as the industry moves towards the Fourth Industrial Revolution.
Currently, more than 90 percent of car accessories and parts are supplied by foreign companies. The low localisation ratio and tax policies have resulted in high car prices which have hindered the development of the automotive industry. However, given the increase in income demographic and infrastructural improvements, the demand for cars are expected to rise. In fact, the automobile market is predicted to grow by 10 percent in 2019.
As such, the government will continue to revise institutional framework and work on favourable, long-term policies for automobile manufacturers and enable more local enterprises to participate in the automobile production chain.
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