The ministry has also proposed a VND100-trillion credit package which will develop the supporting industries, mainly for auto manufacturing. The fresh move brings hope for the automobile industry but also sparks doubt over the result of the huge funds for the project. Over the past dozen years, many plans have been proposed to help the automobile industry increase the local content but the situation has barely improved. The local content is still several percentage points, far below the 40% target, and imported cars have made more inroad into the local market, as many foreign-invested auto assemblers have closed down their plants and switched to auto trading. The author thinks that the automobile industry development plans have failed because management agencies have focused only on the financial aspect with tariffs and incentives, and the big market potential, which has yet to be materialized. In mathematical terms, finance is only the necessary, not the sufficient condition. The sufficient condition is a strong internal force. An experience to learn is the success of Morocco’s automobile industry. From a poor start, it has developed into a strong industry, turning out 335,000 cars in 2017 with a local content of 65%. The rate is expected… Read full this story
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