Impact of FTAs to Vietnam Automotive Industry

For the automotive industry, the import of cars in Vietnam will be completely liberalized towards other ASEAN members under the Free Trade Agreement in 2018, while the agreement with China obliges Vietnam to reduce customs duties for car imports from China to 50% in 2018, reported Vietnam Investment Review.  To export automotives originating in Vietnam to a number of ASEAN members, and in particular to Indonesia, Thailand and Malaysia, Vietnam-originated automotive products exported to those countries have to pay a customs duty variable from 0 to 5 percent, while the same products originating in all the other countries, except ASEAN members, are subject to customs duties variables from 20 to 80 percent. For example, cars originating from the European Union, the United States or Japan to Thailand face customs duties up to 80 percent, while they are tariff free if they originate in Vietnam and in other ASEAN members. There are many car makers in Vietnam, according to the Vietnam Automobile Manufacturers’ Association (VAMA). For local assembled car, the leading brands that recently sold well in Vietnam are Mercedes-Benz Vietnam, Vietnam Motor Corporation, GM Daewoo VIDAMCO, Ford Vietnam, Vinastar (Mitsubishi) with the increase of sales growth of 60%, 50%, 29%, 2 % and 25 %, respectively. Other than that these brands major vehicle models also include  Toyota's brands and Chevrolet Spark.