31 Aug 2012 Intellasia Finance Vietnam - Hong Kong Business ...

FINANCE
Vietnam finance & business 31 August 2012
Equipment
manufacturers lose
out
Vietnamese
companies lack
strategy for exports to
US
ownership registration tax rate of 20 percent, saying that this has discouraged people
to buy cars.
Dau tu has also quoted Sales director of Honda Vietnam as saying that if the requirement
on the procuration from manufacturers themselves is removed, this would badly
affect official car distributors and the business of sales agents.
The director said that the legal document adjustment would be applauded by automobile
manufacturers if the new regulations benefit customers. However, in this case,
customers would not be the beneficiaries from the amendment.
Horst J. Herdtle, CEO of euro Auto, the authorised BMW importer and distributor in
the Vietnamese market, said that authorised distributors have to spend big money to
set up standardised distribution network, which would be a great waste if the regulations
are removed.
Dat Viet newspaper has quoted Michael Behrens, CEO of Mercedes Benz as saying that
what automobile manufacturers need a stable legal framework which allows them to
predict the investment costs and the market performance.
http://english.vietnamnet.vn/fms/business/26281/ministries-make-businesses-feeldizzy-with-unstable-automobile-policies.html
31/AUG/2012 INTELLASIA | VNS
Though an increasing number of power plants are being planned in Vietnam, domestic
firms are unable to get contracts to supply equipment to them mainly because they are
unable to arrange for credit to build the plants.
A national power industry plan for up to 2025 envisages the construction of 52 power
plants with a total capacity of more than 54,700 MW.
Chair of the Vietnam Association of Mechanical Industries, Nguyen Van Thu, told Vietnam
News that 35 of them would be built by domestic investors.
"Equipment will have to be bought for all the plants," he said.
Although Vietnamese companies could not produce the main equipment for power
plants like turbines because of a lack of resources and technology, they could supply
28-30 per cent of other equipment, he said.
"This is a promising opportunity. Unfortunately, the chance has been lost."
Vietnamese investors, faced with a cash crunch, had turned to foreign suppliers and
contractors for financial reasons, he explained.
"Foreign contractors offer Vietnamese investors credit and other financial support."
Phan Dang Phong, deputy director of the National Research Institute of Mechanical
Engineering, concurred.
He told Vietnam Economic Times that while the country was a big market for power
equipment, only foreign firms were benefiting.
He said 90 per cent of the contractors and suppliers were from China and they brought
equipment that could be manufactured in the country and their own personnel.
"The country is pouring money into building power plants but its companies and people
do not benefit," he said.
The Ministry of Industry and Trade should assess the capability of equipment manufacturers
in the country to award them suitable projects, they said.
Power-plant investors who flout the law with regard to equipment purchase should be
punished, they added.
Thu said power plants built with public money should be required to buy equipment
from domestic companies, if available.
http://vietnamnews.vnagency.com.vn/Industries/229511/equipment-manufacturerslose-out.html
31/AUG/2012 INTELLASIA | DTINEWS
Vietnamese exporters have gained a reputation for dumping products in the US market
to compete with foreign rivals, but their lack of attention to quality could harm
their long-term strategy, said an official from the Ministry of Industry and Trade.
The head of the ministry's American Market Department, Nguyen Duy Khien, said,
Intellasia 31 August 2012 20 / 46