Hanoi (VNA) – The use of effective policies in the automobilesector since the beginning of the year has boosted the production andassembling of automobile and better controlled imported vehicles in the firstsix months of 2018.

One of the policies is the reduction of tax on some vehicles importedfrom ASEAN countries to zero percent and the decline of special consumption taxon vehicles with engines under 2.0 litres by 5 percent.

The policies encouraged domestic automobile assembling companies to expandoperations and improve productivity. Notably, Truong Hai Auto Corporation (Thaco)inaugurated a new factory with capacity of 50,000 vehicles per year, while HyundaiThanh Cong also broadened commercial car production to 42,000 vehicles peryear.

Therefore, domestic production and assembling recovered to reach 114,600vehicles of different kinds in the first six months of this year, up about 15.5percent from the same time in 2017.

After two consecutive months of falling, the number of importedautomobiles in March rose with 3,636 vehicles. But the figure reduced slightlyin April and May, and slumped in June when only 2,200 vehicles were imported.

In the first six months, a total 8,315 completely-built under 9-seatvehicles were imported, at a total cost of 188 million USD, representing areduction of 68.6 percent in volume and 58 percent in value.

In the third quarter, the number of imported cars is predicted to increasesharply compared to the first two quarters as enterprises adapt to new policies.

Meanwhile, the Ministry of Industry and Trade forecast that the total numberof automobiles produced and assembled domestically in 2018 will reach about235,000, down 1.3 percent over 2017, with about 60,000 vehicles produced ineach quarter.

The ministry attributed the fall to unequal capacity to adapt to Decree116/2017/ND-CP on conditions for production, assembling, import, trading andmaintenance service supply activities of domestic firms.

To promote domestic automobile growth, the ministry said that it isnecessary to apply measures to better control imported cars and supportdomestic production and assembling.

Along with speeding up the project to expand the factory of HyundaiThanh Cong, the ministry will propose adjusting import tax for automobile spareparts and accessories.

Amendments to special consumption tax rate to vehicles with high localisedcontent will be considered, with exemption given to parts produced domestically.

The ministry will also build a supply chain for automobile sector, whiledesigning policies to attract investment from multi-national groups, focusingon producers of vehicles which have not been introduced in ASEAN as yet.-VNA