According to Decision No. 177/2004/QD-TTg dated October 05th, 2004, promulgated by The Prime Minister, approving the planning on development of Vietnam’s automobile industry till 2010, with a vision to 2020, Vietnam has to achieve the goal of developing Vietnam’s automobile industry by acquiring and applying world’s advanced technologies. By exploiting and gradually improving existing technologies and equipment, Vietnam’s automobile industry, at first, has to meet most of the requirements of domestic automobile market, and then, moving toward exporting automobile and accessory. Specific goals need to be achieved: - Popular automobiles: meet 40-50% of the domestic demand in terms of quantity and get a localization rate of 40% by 2005; meet above 80% of the domestic demand in terms of quantity and get a localization rate of 60% by 2010 (For engines, the localization rate shall reach 50% by 2010, and for gearbox, it shall reach 90% by 2010). - For special-use automobiles: meet 30% of the domestic demand in terms of quantity and get a localization rate of 40% by 2005; meet 60% of the domestic demand in terms of quantity and get a localization rate of 60% by 2010. - For high-class automobiles: Tourist cars manufactured by joint ventures must reach the localization rate of 20-25% by 2005, and 40-45% by 2010. For high-class buses, the localization rate shall reach 20% by 2005 and 35- 40% by 2010, meeting 80% of the domestic requirement. Although specific goals were set, almost all of the goals have not been met till now. For instance localization rate just reaches 12% and the prices are too high compared to the income of Vietnamese. It could probably be caused by many different reasons, among of which the main reason is we did not foresee the difficulties and complexity of automobile industry. For example, Thailand, a leading country in East Asia in automobile manufacture with production of 1.2 million vehicles/year, does not have its own brand name cars. It does not mean that Thailand automobile industry is underdeveloped because it has 700 car components manufactures and 1000 auxiliary manufacturers, turning Thailand into a reliable supplier to most of car manufacturers in the world. In China, automobile industry has been developed for 30 years and protected by the government. Till now, there are just few so-called “big manufacturers” out of 2500 car manufacturers and car components manufacturers in China. Annual turnover of China’s Automobile Industry is lower than car sales of a medium-sized car manufacturer in Japan, USA or Europe. In India, the first car appeared in 1898. Since then, India has attached special importance to development of automobile industry. However, due to its economic characteristics, cars manufactured in India serve middle class or lower classes only. India automobile industry is more and more developing and becomes a “power” in automobile industry worldwide. India is now the second biggest motorcycle manufacturer in the world; ranks 11th in manufacturing tourist cars and ranks 13th in manufacturing commercial cars. India is now an ideal destination for many big manufacturers in the world and realizes its ambitions to be a leading center for automobile manufacturing in 2016 with “Action Plan of Motors”. Its goal is to reach production of 32 million vehicles in period of 2015-2016 with total investment of 35-40 billion US dollars. Above analyses help to produce the judgment that it takes many years to develop our automobile industry, depending on the development of our economy and on related industries. Therefore, it is necessary to analyze development ability of Vietnam’s automobile industry based on its current status, requirements and ability to satisfy the requirements.