TY - JOUR
T1 - Stuck in Neutral
T2 - Vietnam's Automobile Industry Policy
AU - Schröder, Martin
N1 - Funding Information:
11. The author was part of a research team supported by the Japan International Cooperation Agency (JICA), which supported the Ministry of Industry and Trade in basic fact-finding and development strategy consultation in 2016 and has conducted research in Vietnam during research projects supported by the ERIA in 2015, 2017 and 2018. During these various projects, the author interviewed six OEMs or assemblers as well as a greater number of foreign and local suppliers. Based on these interviews, a common complaint is the lack of market growth. It should be noted however, that this complaint is self-serving for a simple reason. Currently, all OEMs almost exclusively make cars for the domestic market plus a very low volume export to less developed neighbouring countries such as Cambodia and Laos. Thus, production expansion is entirely driven by domestic demand. Since carmakers until recently have not considered using Vietnam as a production base for both the local and export market, they made themselves prisoners of their own strategy that used to rely on assembly for a heavily protected market.
Funding Information:
This research was partially funded by a grant from the Economic Research Institute for ASEAN and East Asia (ERIA) and the author’s research allowance from Kyushu University. The author would like to thank Tham Siew Yean and two anonymous referees for detailed comments but remains solely responsible for all errors.
Publisher Copyright:
© 2021 ISEAS - Yusof Ishak Institute
PY - 2021/8
Y1 - 2021/8
N2 - Vietnam's automobile industry is undergoing transformational change as the country is pursuing global and regional economic integration. While this overall policy direction is unambiguous, sectoral policy suffers from contradicting policy objectives of different ministries, lacking coordination and clarity in government-industry communication. Analysis of policy measures indicates that Vietnam briefly sought to protect the automobile industry from liberalization, but quickly abandoned these measures as they proved to be ineffective. To allow Vietnam's automobile industry to develop further, it is suggested that the government must overcome internal conflicts, improve stakeholder participation and extend support to the supplier industry, which provides most inputs for vehicle production.
AB - Vietnam's automobile industry is undergoing transformational change as the country is pursuing global and regional economic integration. While this overall policy direction is unambiguous, sectoral policy suffers from contradicting policy objectives of different ministries, lacking coordination and clarity in government-industry communication. Analysis of policy measures indicates that Vietnam briefly sought to protect the automobile industry from liberalization, but quickly abandoned these measures as they proved to be ineffective. To allow Vietnam's automobile industry to develop further, it is suggested that the government must overcome internal conflicts, improve stakeholder participation and extend support to the supplier industry, which provides most inputs for vehicle production.
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U2 - 10.1355/ae38-2e
DO - 10.1355/ae38-2e
M3 - Article
AN - SCOPUS:85126691173
SN - 2339-5095
VL - 38
SP - 223
EP - 243
JO - Journal of Southeast Asian Economies
JF - Journal of Southeast Asian Economies
IS - 2
ER -