South Korea supplants Japan as biggest seller of car parts to Vietnam

According to the General Department of Customs, Vietnam’s imports from South Korea in the first seven months were worth $688.36 million, rising 57.58 percent year-on-year.

Japan moved down to second place with $431.89 million, down 6.86 percent, while China remained third with $412.64 million, up 15.7 percent.

Overall, imports of automobile parts and accessories increased by 15.3 percent to $2.3 billion between January and July.

According to the Ministry of Industry and Trade, Vietnam imports over 90 percent of its auto parts.

The local supporting industry remains weak compared to those of other countries in the region. There are only 358 such businesses in the country compared to 2,500 in Thailand, the ministry said.

Vietnam is seeking to support local manufacturers. The trade ministry is considering removing the special consumption tax on car parts produced in the country, which would apply for 5-10 years, covering cars with 9 seats or under.

It is also considering tax incentives for electric cars to promote the production and consumption of such vehicles.

Car consumption in Vietnam last year was 288,683 units, up 6 percent from 2017, of which 68 percent were passenger cars, according to the Vietnam Automobile Manufacturers Association (VAMA).