The newly-established automobile and motorbike working group of the Vietnam Business Forum (VBF) which started its annual meeting in Hanoi on Monday has suggested putting the auto and motorbike industries into the high technology group to be given incentives for further development.

According to the group, the auto and motorbike industries now are not subject to any investment incentives in line with the orientation to develop the hi-tech industry. Therefore, the group has suggested adding the industries into the hi-tech group to enjoy other incentives accordingly.

International practices and reality show that the auto and motorbike industries play an important role in technological advancement worldwide, the group said.

Also, the industries’ development is closely related to the development of national technology levels, skills and know-how and the education system. The number of engineers of a country is a vital measure for the renovation ability and competitiveness of that nation.

Especially, investing into supporting industries and manufacturing a number of high-value parts like engines, engine components and electric systems have a very important meaning in helping Vietnam shift from the cost advantage to the technological sustainability.

Metallurgy, mechanics and part production with high precision are the important manufacturing processes of the auto and motorbike industries. But the processes are still underdeveloped in Vietnam due to the absence of technological know-how.

A strong encouragement mechanism will help reduce risks of new local firms joining the market.

At the moment, identifying which levels or what kind of taxes will be applicable depends on the origin of vehicles and this is a challenge. It is because preferential treatment may be effective with the application of different bilateral agreements such as ASEAN Trade in Goods Agreement, Vietnam-Japan Economic Partnership Agreement or ASEAN Free Trade Area.

Consequently, a road map for applying different taxes and policies to the auto and motorbike industries by 2015 will bring about benefits to the industries, customers and the country in general, the group said.

The stable tax regime and policies in the long term will consolidate confidence of investors, thus stimulating the industries’ growth.

The Saigon Times Daily