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BUSINESS Hanoi signs protocol to back Russian automobile production in Vietnam

2016-03-22 17:23:29

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Cooperation between the Russian and Vietnamese automobile industries has reached new heights following a protocol signed on Monday, the Russian Ministry of Industry and Trade said.
 
Vietnamese Minister of Industry and Trade Vu Huy Hoang met with his Russian counterpart Denis Manturov in Moscow on Monday, as part of his four-nation trip to Europe.
 
Following the meeting, the ministers signed an intergovernmental protocol on supporting Russia’s production of motor vehicles in Vietnam, the Russian ministry said in a press release.
 
The agreement is the first bilateral cooperation deal to be inked following the free trade pact Vietnam signed with the Moscow-led Eurasian Economic Union in May 2015, according to Minister Manturov.
 
“It aims at deepening trade and industrial cooperation between the two countries, increasing mutual trade turnover of industrial production and investment,” the Russian minister said.
 
The newly signed protocol will pave the way for Russian firms to produce motor vehicles, namely buses, trucks, special vehicles, light commercial vehicles and passenger cars, in Vietnam, according to the Russian ministry.
 
In particular, three Russian producers, GAZ Group, KAMAZ and Sollers, will be eligible for duty-free import of automobiles and car kits into Vietnam.
 
The quota-driven import will not only increase the export of Russian automotive products, but also open new markets for Russian equipment including the entire ASEAN region, the ministry said.
 
According to the document, the total quota for the import of cars into Vietnam will be 2,550 units over three years, and 13,500 car kits over five years. The localization of production is set to be between 40 and 50 percent by 2025.
 
By the end of this year, Russia will be able to transport 800 units free of duty to Vietnam, according to the ministry.
 
Russian companies will then be able to save more than 3.5 billion rubles (US$51.4 million) on the export of vehicles to Vietnam in the first three years of the protocol’s operation.
 
The cooperation, in the meantime, will benefit Vietnam by creating jobs and increasing state revenues from taxes, while helping the Southeast Asian country gain access to new production technologies and make new kinds of industrial production such as car and car components.
 
Besides cooperation in the automobile industry, Russia and Vietnam are actively developing projects in the fields of light industry, aerospace, pharmaceutical and shipbuilding, according to the ministers.
 
The Vietnamese minister is visiting Germany, France, Russia and Belarus from March 16 to 27, according to a note on his ministry’s website.
 
Source: tuoitrenews. 
 
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