Fears are being expressed that the end of import tariffs on built-up car imports to Vietnam – under trade agreements – could cause manufacturers with assembly plants to quit Vietnam unless there are compensatory tax breaks from the government.
A Toyota official expressed his concern to Reuters. “Unless the Vietnamese government puts tax and other advantageous measures in place, the worst-case scenario (of withdrawal) is possible,” said Kyoichi Tanada, managing officer in charge of the Mekong region.
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Reuters noted that Vietnam currently imposes a 50% tariff on fully built-up imported vehicles, but tariffs in the region are planned to be scrapped in 2018. That could mean imports from other countries in the region – such as Thailand and Indonesia – undercut locally made vehicles.
The report added that Toyota expects to produce some 40,000 vehicles at its Vietnamese factory this year. Toyota sold around 33,000 vehicles in Vietnam last year, leading the market with a roughly 30% share, Reuters said.
