FDI Attraction: Long-term Strategy Needed

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Foreign direct investment (FDI) enterprises have continuously played an important position in the economy and significantly contributed to the country’s economic development in the past years. However, FDI enterprise management mechanisms have shown a lot of shortcomings. According to experts, transfer pricing and tax evasion are major concerns in administering FDI firms. Benefits Shortcomings in FDI enterprise management are puzzling the Government and relevant authorities in handling emerging issues in this business sector. When the Hanoi Customs Department and its Vinh Phuc Customs Branch decided to retrospectively collect VND182 billion of taxes from Honda Vietnam Company in 2011 after they performed an inspection, this company immediately announced a review of its future production and business operations in Vietnam. Like the case with Honda Vietnam, Metro Cash & Carry Group had operated in Vietnam for 13 years and opened 19 operating wholesale centres across the … [Read more...]

Science and technology student award launched

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Winners of Honda Y-E-S Award 2014 (Photo: vnexpress.net) NDO/ VNA – The Honda Young Engineer and Scientist’s Award (Y-E-S Award) was launched on May 4 at eight universities across Vietnam. The programme is being organised by Honda Vietnam (HVN) in association with the Honda Foundation and the National Institute for Science and Technology Policy and Strategy Studies (NISTPASS). Honda’s eight affiliated universities are the Hanoi University of Science and Technology; University of Engineering and Technology; University of Science at Vietnam National University, Hanoi; University of Science at Vietnam National University, Ho Chi Minh City; Da Nang University of Technology; Ho Chi Minh City University of Technology; Hanoi University of Transport and Communications; and Ho Chi Minh City University of Transport. The awards will be granted to students who excel in science and technology with active participation in extra-curricular activities. Online registration … [Read more...]

No guidelines available for auto industry development strategy

A Mazda model distributed by Thaco - PHOTO: TL

Ngoc Lan Vietnam will have to lower the duties currently applied on completely built-up (CBU) auto imports to 0% in 2018 in line with the ASEAN Trade in Goods Agreement (ATIGA). Meanwhile, Toyota Motors Vietnam has implied ending its local auto assembly and shifting to auto imports. That might be the reason the ministry held a seminar early last week to find ways to rescue the long-backed auto industry. Despite a slew of policy incentives the ratios of local content in automobiles assembled in the country have remained low. Tran Anh Tuan, deputy head of the ministry’s Heavy Industry Department, said the nation’s total assembly and production output is around 460,000 units a year, half of them cars and the remainder trucks and buses. Local enterprises mostly do simple assembly work. Truong Hai Auto Co. (Thaco) puts its localization ratio at 15-18% and Toyota Vietnam at 37% for the seven-seat Innova. For light trucks, Thaco reaches 33% and Vinaxuki 50%. Thaco … [Read more...]

FDI Impacts on Vietnam Economy

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"Capital flows will spur economic growth, generate employment, transfer technology or turn Vietnam into a production base of the world with a low ripple effect and negative impacts on the environment" is the main content of the seminar on "FDI impacts on Vietnam economy" held recently in Hanoi. Growth-spurring capital Mai Thi Thu, Director of the National Centre of Socioeconomic Information and Forecasting, said since the Law on Foreign Investment was issued in 1987, FDI capital has had great impact on Vietnam’s economy by mobilising capital for development and promoting economic development. FDI also contributed towards creating conditions for the transfer of technology, accelerating economic restructuring, generating jobs for the local people and accelerating the country's global integration. This sector spent US$23.09 billion on imports in the review period, up 24 percent year on year and accounted for 62 percent of the country’s total imports. Thus, their trade … [Read more...]

Honda Vietnam at odds with ministry over almost $10mn tax arrears

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The Vietnamese unit of motor maker Honda and the Ministry of Finance still fail to reach an agreement on a preferential tax treatment the company is supposed to enjoy, thanks to which it refuses to pay nearly US$10 million in tax arrears. Honda Vietnam Co. Ltd. has been asked to pay VND182 billion ($8.48 million) in tax arrears and fines, Deputy Minister of Finance Do Hoang Anh Tuan said at a government meeting on Saturday. While the company has followed the order, it still owes "a large sum of money" to the state budget, Tuan added without elaborating the violations of the motor manufacturer. Honda Vietnam went under a tax inspection in 2014, and was eventually asked to pay nearly VND400 billion ($18.64 million) in tax debts and fines, another finance ministry official told Tuoi Tre (Youth) newspaper on Sunday. The company, which has two motor-manufacturing plants and a car-making facility in Vietnam, has so far paid only VND182 billion of the sum, and thus still owes around … [Read more...]

Social News 25/4

Third blood donation campaign targets 20,000 donors "Hanh trinh Do" (Red Journey), a campaign calling for blood donation across Vietnam, was launched for the third time in Da Lat city in the Central Highlands province of Lam Dong on April 23. The 35-day event will run in 23 cities and provinces nationwide, with goals to attract 20,000 donors and receive at least 17,000 blood units. Two groups with 140 volunteers will stop by localities to launch charitable and educational campaigns about blood donation and healthcare for the public. On the occasion, the National Steering Committee for Voluntary Blood Donation and the Central Committee of the Vietnam Red Cross Society opened training courses for information volunteers for the cause. Held in July 2013 and 2014, the Red Journey has collected over 28,300 units of blood. This year's event was co-hosted by the National Steering Committee for Voluntary Blood Donation and the National Institute of Haematology and Blood Transfusion. Ho … [Read more...]

Honda Vietnam kicks off tree planting project

A staffer of Honda Vietnam plants a tree in Bac Kan Town - PHOTO: HONDA VIETNAM

Quoc Hung The event was attended by 200 staff members of Honda Vietnam and its partners, and a number of local people to plant trees on an area of two hectares in Bac Kan Town of the province. This is the third year the Japanese-invested firm’s tree planting project has been executed, with a total of 65.54 hectares of land to be replanted. Expected to take eight years to finish, the project will replant 490 hectares of protected forest in Nong Thuong and Xuat Hoa Communes in the initial phase from 2013 to 2016. The second phase will be to take care, prune and protect the forest in the following four years, and wood can be exploited from 2020. As the only sponsor of the project, Honda Vietnam pledged to fund VND4.9 billion (US$227,000), including covering the full cost of developing the project, training personnel, buying high-quality seeds, and covering 15% of the cost of caring the trees and 10% of the total fertilizer cost. The participating households can benefit … [Read more...]

Vietnam motorcycles set record in super save gas

Honda Vietnam General Director Minoru Kato awarded representatives of two winning teams are wind wing (left) and CKOUTC1 team. (Photo: Van Xuyen / Vietnam +)

Final round "Eco Driving - Economy Fuel of Honda Vehicles" (Honda EMC 2015) in Vietnam in 2015 took place at the National Convention Center (Hanoi) on April 12, set a new record with a liter of petrol a vehicle can go over 2.109km, exceeding the record of 1,164km in 2014. Contest of "eco-driving – fuel saving of Honda vehicles'' was launched since 1981 by Japan Honda to enhance creativity in working group and comprehension of environmental protection to students as well as society. In Vietnam, the competition was launched since 2010 by Honda Vietnam Company and this year is the 6th consecutive year the contest was held. Honda EMC 2015 was launched since September, 2014 by Honda Vietnam. It attracted 147 teams across the country, including 109 teams with homemade vehicle contents and 38 teams with market vehicle contents, in which 90 teams are students. The final result, in the category of homemade vehicles, Wind Wing team won the championship with a record 2.109,512 km / … [Read more...]

Social News 22/4

National vaccine safety surveillance programme meets WHO requirements Vietnam’s surveillance of adverse events following vaccination meets the requirements of the World Health Organisation (WHO), said experts from the organisation. After a one-week mission to Vietnam from April 9 to review the implementation of the Vaccine Adverse Event Reporting System (VAERS) in the country, the WHO team announced that all six components under Vietnam’s NRA system have passed the check with good results. The team, including 14 experts from the WHO and two observers from Russia urged the Department of Preventive Medicine under the Ministry of Health and the post-vaccination monitoring systems at all levels to continue their efforts in the field. During the checking process, the team made field trips to the southern province of Tay Ninh where they had working sessions with the provincial preventive medicine centre, the municipal medical centre of Tay Ninh City and the medical station of … [Read more...]

Tree planting project takes root in Bac Kan

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Honda Vietnam leaders take part in the tree planting project. Source: VNA A special "Tree Planting Day 2015" was held in the northern province of Bac Kan by the Honda Vietnam Company (HVN) and the provincial department of agriculture and rural development on April 19. HVN’s General Director Minoru Kato said the event is part of an eight- year project (from 2013 to 2020) developed by the local government alongside the Japan International Cooperation Agency (JICA) and Vietnam Forestry University. As the sole sponsor of the project, HVN has provided 4.9 billion VND (233,000 USD) for planting trees over 490 hectares of protective forest land in two communes of Bac Kan town. This has covered the costs of project preparation, agricultural training for forestry officials and local farmers and the purchase of high-quality seedlings and fertilisers, he added. He noted that trees will be planted from 2013-2016, while the next four years will see the trees thinned out but protected. … [Read more...]

Trade deal hurting local auto makers

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The Vietnam Association of Mechanical Industry (VAMI) has requested the Prime Minister and the Ministry of Finance to adjust the import tax imposed on complete built up (CBU) trucks. This has been requested so the revised tax is more in keeping with tax levied on trucks, which are locally-assembled with imported parts that are complete knock down (CKD). The proposal was made after VAMI members evaluated the import tax imposed on CBU trucks and the current tariff regulated under the finance ministry's circular, which is an implementation of the ASEAN–China Free Trade Agreement (ACFTA) for the 2015 to 2018 period. VAMI said the ministry had allowed a number of imported CBU trucks the kind of preferential tax rate, which is unfair for domestic manufacturers who have been producing and assembling trucks with CKD parts. It added that when importing CKD parts, besides import tax, domestic firms are also burdened with many other costs, such as investment capital plugged into … [Read more...]

Monthly auto sales fall dramatically

Cutomers view an imported Mercedes S-Class car at a showroom of Mercedes Benz Vietnam (Photo: VNS/VNA) Automobile sales reached 12,329 units in February, a 38 percent drop from January, reported the Vietnam Automobile Manufacturers’ Association (VAMA). Despite the plunge, the figure still represented an annual leap of 69 percent. More than 7,900 of the cars sold were assembled in Vietnam, down 41 percent, while another 4,400 were foreign imports, down 32 percent, VAMA said. In February, the Truong Hai Auto Corporation led car sales with 2,965 sales, followed by Toyota Motor Vietnam (2,868 units), Ford Vietnam (925 units), Honda Vietnam (505 units), and GM Vietnam (419 units). Two-month automobile sales soared 76 percent from the same period in 2014. The sales of domestically assembled and imported units shot up 73 percent and 111 percent annually, respectively.-VNA … [Read more...]

E5 RON 95 petrol not yet available in Vietnam

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VietNamNet Bridge – The biofuel E5 (ethanol 5 percent) RON 95, used in next-generation vehicles, is still not available in Vietnam, while E5 RON 92 is being sold at hundreds of filling stations nationwide. E5 RON 92 was first available at stations in December 2014, under a national program on promoting biofuel for motor vehicles. Petrolimex, which holds 60 percent of the domestic petrol distribution market, and Saigon Petro and PVOil have confirmed they are selling only E5 RON 92. Distributors in HCM City said that customers have asked for E5 RON 95 for high-end scooters, such as Honda SH and Vespa Primavera/Sprint. Meanwhile, salesmen at filling stations of Comeco and SFC said taxi drivers do not want to shift to E5 RON 92 because they have been using A95 for a long time. Petroleum distributors can mix E5 RON 92 and E5 RON 95. Binh Son Petrochemistry and Refinery Company (BSR) said it could ensure a stable supply of both A92 and A95 petrol, but it has only launched E5 … [Read more...]

Honda to double Vietnam bike exports to 100,000 units

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Japan's automaker giant Honda Motor Co. has targeted to double its made-in-Vietnam bike exports this year in an ambitious plan to become the biggest market share holder for motorbikes in more Asian countries, a Japanese business magazine reported recently. Honda Motor will export 100,000 motorbikes manufactured in Vietnam in 2015 as the company is fortifying its presence in Myanmar, Laos and other developing Southeast Asian countries, according to Nikkei Asian Review. The Tokyo-based automaker is currently the marker leader in Vietnam, Thailand and Indonesia. The company also has plans to boost demand to replace their motorbikes among Vietnamese consumers by introducing higher-end models, Nikkei Asian Review reported. Honda’s made-in-Vietnam 50cc scooters are being exported to Japan, whereas those with 100cc and larger engines are shipped to Europe and other places. Honda exported some 40,000 bikes from Vietnam in 2014. In November 2014, Honda Vietnam inaugurated its third … [Read more...]

Honda to double Vietnam bike exports to 100,000 units: report

Honda Motor will export 100,000 motorbikes manufactured in Vietnam in 2015 as the company is fortifying its presence in Myanmar, Laos and other developing Southeast Asian countries, according to

Japan's automaker giant Honda Motor Co. has targeted to double its made-in-Vietnam bike exports this year in an ambitious plan to become the biggest market share holder for motorbikes in more Asian countries, a Japanese business magazine reported Friday. Nikkei Asian Review. The Tokyo-based automaker is currently the marker leader in Vietnam, Thailand and Indonesia. The company also has plans to boost demand to replace their motorbikes among Vietnamese consumers by introducing higher-end models, Nikkei Asian Review reported. Honda’s made-in-Vietnam 50cc scooters are being exported to Japan, whereas those with 100cc and larger engines are shipped to Europe and other places. Honda exported some 40,000 bikes from Vietnam in 2014. In November 2014, Honda Vietnam inaugurated its third motorcycle production plant in the Southeast Asian country in the northern province of Ha Nam, some 40km from Hanoi. The US$120 million facility has an annual production capacity of 500,000 … [Read more...]

Number of registered bikes exceeds 2020 vision

A motorcycle traffic jam is seen in this file photo. The number of registered motorcycles had surpassed 43 million as of last December nationwide - PHOTO: TL

Hung Le The number was unveiled at the signing ceremony for a cooperation agreement on traffic safety between the Vietnam Association of Motorcycle Manufacturers (VAMM) and the National Traffic Safety Committee on Wednesday. Compared to the master zoning plan approved by the Government in February 2013, the number of registered motorcycles has beaten the target of around 36 million units by 2020. However, there have been no statistics on the exact number of motorcycles on the nation’s roads. The master zoning plan also sets a limit to the volume of motorcycles by administrative, economic and technical measures, and this means of transportation will be mainly used in rural areas where public transportation is not available. In the past years, Vietnam has become a lucrative market for many motorcycle manufacturers while many big cities worldwide have started to restrict motorcycles. However, motorcycle sales have declined in recent years. According to Vietnam Register, … [Read more...]

Honda Vietnam achieves new record on auto sale in 2014

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Illustrative image (Source: HVN) Honda Vietnam (HVN) sold as many as 6,492 automobiles in 2014, up 41 percent from 2013, according to D irector of the Automobile Division at Honda Vietnam Tomohiro Maruno. The figure is the highest number of annual auto sales in Vietnam since HVN was established, bringing the company to the fourth highest touring car sales rate among leading auto businesses. From the outset of 2014 , HVN boosted sales by offering promotional programmes and launching catalogue products such as new generations of the City and Accord as well as new versions of the Civic and CR-V. Accordingly, the fourth generation of Honda City and CR-V 2015 were the two best selling brands of HVN in 2014. With 2,944 cars sold, sales of Honda City’s in 2014 were more than double those of 2013, with an additional 2,918 CR-V’s sold, up 34 percent from 2013. In December alone, consumers bought a total of 837 vehicles, an 18 percent increase from the same period last … [Read more...]

Electronic giants pioneer Vietnam’s support industry

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(VOV) - Foreign direct investment has been the catalyst for economic growth in Vietnam over recent years, and capital investment by foreign enterprises continues to set the pace for development of the nation’s support industries. Intel is believed to have started the second wave of foreign investment in Vietnam when it built a US$1 billion chip manufacturing facility in Ho Chi Minh City back in 2010 but it was Samsung who sealed the deal. The Republic of Korean technology giant has methodically moved its manufacturing base to Vietnam away from China and currently contributes up to nearly 20% of the total export turnover of Vietnam. In recent years, international giants such as Samsung, Intel, Canon, Panasonic, Fujitsu, LG, Bosch and Nokia have followed suit pumping billions of US dollars into the Vietnamese electronics industry. Samsung has injected billions of US dollars into smartphone production plants in the country, principally in the Hanoi metropolitan and surrounding … [Read more...]

Honda considers relocating Vietnam bike production back to Japan

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Japanese automaker giant Honda Motor Co. is weighing the possibility of relocating part of its motorcycle production in Vietnam back home as Japan’s domestic manufacturing costs have fallen over the weak yen, a representative with its Vietnamese unit has said. The production and assembly lines of motorbikes with under 50cc engines could likely be relocated to Kumamoto Prefecture this year, according to the Honda Vietnam representative. Details for the plan could not be disclosed immediately, the source added. It was reported earlier this year that the production lines will be transferred back to Japan to meet domestic demand. Honda’s annual motorbike sales in the Japanese market are around 200,000 units, half of which are those with under 50cc engines. With production costs in Japan soaring, the company previously had to move part of its production to Vietnam to save costs. But it is now costlier to import made-in-Vietnam motorbikes than make them … [Read more...]

Breakfast @ Tuoi Tre News – January 14

Politics    -- The Vietnamese government has just released a decree on implementing democracy in state administrative agencies.    Society

Enjoy your breakfast while reading these news items in brief on Tuoi Tre News today, January 14, 2015 -- Several political leaders including Deputy Prime Minister Nguyen Xuan Phuc on Tuesday visited Nguyen Ba Thanh, chief of the Party Central Committee’s Commission for Internal Affairs, at Da Nang Hospital in the central city of Da Nang, where he is receiving treatment for his myelodysplastic syndrome. Thanh is now alert and can eat soup, porridge and some other easily digestible food. -- The Vietnam Airport Traffic Management (VATM) on Tuesday inaugurated the Hanoi Air Traffic Control Center. The three-year construction project cost VND750 billion (US$34.95 million). -- About 4.5 percent of Hanoi people, the majority of whom are young, were unemployed in 2014, the capital’s Department of Labor, War Invalids, and Social Affairs told a Tuesday meeting. -- Le Quy Vuong, Deputy Minister of Public Security, said during an online meeting on traffic safety in Hanoi on … [Read more...]