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Toyota Threatens to End Production in Vietnam
Toyota Motor Corp. says its local vehicle production in Vietnam may no longer be feasible when the country ends import tariffs, The Nikkei reports.
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Toyota Motor Corp. says its local vehicle production in Vietnam may no longer be feasible when the country ends import tariffs, The Nikkei reports.
Vietnam currently has 18 foreign and 38 domestic companies making cars at a rate of about 460,000 units per year, according to the Ministry of Industry and Trade. Toyota sold about 33,000 vehicles in Vietnam last year and expects to make some 40,000 units locally in 2014.
The country fosters local production with a 50% tariff on imported cars. But that protective tax will disappear in 2018 under the new ASEAN trade agreement, thus triggering a flood of low-cost imports.
Toyota says it might shut down local production unless the government provides tax incentives and other measures to protect the country's local manufacturing base.
Truong Hai Auto, which assembles roughly 30% of all new vehicles sold in Vietnam, issued a similar warning in April. Thaco builds its own commercial vehicles and assembles cars from kits under contract for Kia, Mazda and PSA Peugeot Citroen.
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