Vietnam - to collaborate with Belarus, Russia to make cars, trucks

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The Vietnamese government is looking to collaborate with Russia and Belarus in automobile manufacturing in an apparent effort to boost the local auto industry.

The governments finished talks on the collaboration last week and are expected to ink official agreements some time between the end of next month and the beginning of March, the Ministry of Industry and Trade reported on Monday.

According to the plans, Vietnamese automakers will join hands with foreign companies such as KAMAZ, GAZ, UAZ and MAZ to set up joint-ventures here to produce and assemble vehicles such as trucks, cars with more than 10 seats, and off-road cars.

Their products will also be exported to Southeast Asian countries to enjoy a tariff-free policy that will take effect in 2018, it said.

The joint-ventures will be first allowed to import complete units tax-free to sell in Vietnam. After learning more about the local market, they will then bring in parts for assembly, also free of tax.

In return, foreign manufacturers are obliged to provide technical support for local parts suppliers. The goal is to increase the ratio of local parts and components in their products to 35 percent in 2020, and 45 percent in 2026, it said.

Vietnam's auto industry has for years failed to live up to the high expectations set for it after many favorable policies. Critics said after decades of government support, the industry mostly does assembly work for foreign companies, with the use of local parts and components remaining painfully low.