The automobile industry in vietnam and thailand in a comparative perspective

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY FULBRIGHT ECONOMICS TEACHING PROGRAMME HUỲNH THỊ KIỀU OANH THE AUTOMOBILE INDUSTRY IN VIETNAM AND THAILAND IN A COMPARATIVE PERSPECTIVE MASTER’S THESIS ON ECONOMICS MAJOR: PUBLIC POLICY CODE: 603114 Supervisor: Jonathan R Pincus i CERTIFICATION I certify that the substance of the study has not already been submitted for any degree and is not being currently submitted for any other degrees I certify that to the best of my knowledge any help received in preparing the study and all sources used have been acknowledged in the study The study does not necessarily reflect the views of the Ho Chi Minh City Economics University or Fulbright Economics Teaching Program Huynh Thi Kieu Oanh ii ACRONYMS AND ABBREVIATIONS AFTA ASEAN Free Trade Agreement AICO ASEAN Industrial Cooperation Organization BBC Brand-to-Brand Complementation CEFT Common Effective Preferential Tariff CBU Completely Built Unit CKD Completely Knocked Down IEs Industrial Estates IL Inclusion List IKD Incompletely Knocked Down JVs Joint ventures LVCs light commercial vehicles Samco Saigon auto-mechanics Corporation TEL Temporary Exclusion List UK United Kingdom US United States VEAM Vietnam Engine & Agriculture Machinery Corporation Vinacoal Vietnam Coal Corporation Vinamotor Vietnam Motor Corporation WTO World Trade Organization ACKOWLEDGMENTS To finish this paper, I have received many helps I am heartily grateful to Professor Jonathan R Pincus for his supervision and guidance His support and guidance from the initial to the final level help me to develop this subject He also read and corrected my grammars very carefully and in details Also I would like to thank FULBRIGHT teachers and staffs in helping me to broaden my view and knowledge during my studying And I would like to express my deepest gratitude to my parents and friends in supporting me I offer my regards and blessings to all of those who supported me in any respect during the completion of the paper Huynh Thi Kieu Oanh CONTENTS INTRODUCTION THE AUTOMOBILE INDUSTRY 2.1 Performance 2.1.1 Thailand 2.1.2 Vietnam 2.2 Policies and development 13 2.2.1 Thailand 13 Before the 1997 crisis: protectism, agglomeration and development 13 Tariff and tax policy .14 Localization and other policies 15 Developments of the automobile cluster and supporting industries 18 After the 1997 crisis: Trade and investment liberalization and global and regional integration .19 Abolishing local content requirements and restructuring tariffs and other taxes .19 Promoting the development of related and supporting industries and large automobile cluster investments 21 2.2.2 Vietnam 22 Before 2004: High protection for agglomeration 23 After 2004: Protection decreasing, but remains high .25 2.3 Explaining the differences and learning 27 2.3.1 Differences 27 2.3.2 Explanation .28 The domestic market is shrunk by government’s policies, especially current tariff and taxes 28 Supporting industries in Vietnam have not developed, especially an autoparts industry to be able to localize production .31 Vietnam also has some policies, such as land, R&D, financing policies but they are not clear and useful 33 2.3.3 Lessons .33 POLICY RECOMMENDATIONS 34 3.1 Changing the current tariff and tax policy 35 3.2 Developing of related and supporting industries 36 3.3 Development of infrastructure 37 CONCLUSION .38 REFERENCES .39 APPENDIX 42 TABLES Table List of FDI automakers in Vietnam 10 Table The production volume of 11 JVs (in units), 1996 – 2002 11 Table Tariff and tax rate (%) related to CBU and CKD vehicles, before 1992 – present 14 Table Regulations to Thailand’ zone 21 FIGURES Figure Major functions within the automobile industry Figure Competitiveness Diamond Figure Thailand’s automobile production (in units), 1993 – 2008 Figure Thailand’s automobile sales (in units), 1993 – 2008 Figure Thailand’s automobile sales share by producers (%), 2005 Figure Thailand’s automobile exports (in units), 1996 – 2008 Figure The VAMA’s sales volume (in units), 2000 – 2009 11 Figure Vietnam’s automobile sales share by companies (%), 2005 .12 INTRODUCTION The automobile industry was acknowledged as the “the industry of industries” in the twentieth century and is considered one of the most globalised industries today (Wad, 2009) From Figure 1, we see that the automobile industry is related closely to many industries such as steel, electronics and textiles and contributes to the development of many service industries such as finance, marketing, retailing and banking So a country that has a developed automobile industry will create good conditions for promoting the development of other industries This industry contributes largely to socio - economic development and job creation So, in the ASEAN countries, such as the Philippines, Thailand, Indonesia, Vietnam and Malaysia, it is one of the most important and supported industries Development of the automobile industry, covering car and component manufacturing, is usually sought by policymakers in the developing and developed countries (Kohpaiboon, 2008) Figure Major functions within the automobile industry BODIES MAJOR SUPPLYING INDUSTRIES Manufacture and Stamping of body panels Body assembly and painting ENGINES AND TRANSMISSIONS COMPONENTS Steel and other Manufacture of mechanical andForging electrical instruments, system, andcomponents, casing of e.g Machining andbraking assembly of metals Manufature of wheels, types, seats, exhaust systems, enginewindscreens, and transmission enginesetc and transmissions steering Final components assembly CONSUMER MARKET Rubber Electronics Plastic Glass Textiles Source: The changing nature of the Asian automobile industries (cited from http://www.unescap.org/tid/publication/chap1_2212.pdf ) Vietnam’ automobile industry has begun since 1991 But up to now, it is small and underdeveloped Sales volume is very low, about 100,000 units per year This influences very much to generate economies of scale of assemblers and autoparts companies And now the local assembly industry in Vietnam is dominated by foreign-invested joint ventures (JVs) It is focused solely on serving the domestic market In recent years, Vietnam has had many incentives to protect its automobile industry with a view to increasing the local content and reducing the price of vehicles However, up to now, the local content rate is only about between 2% to 10% So, local assembly products are heavily reliant on imported parts In addition, car price is very high According to the survey of the Ministry of Finance, on th November , 2008 the Toyota Corolla 1.8MT was sold in Vietnam with the price of 19,532 USD while in other countries, it was sold 15,350 USD Similarly, the Toyota Camry 3.5 is 38,510 USD in Vietnam while the world price is from 24,215 USD and 28,695 USD These results are against the government’s expectation and also demonstrate that Vietnam’s policies have not worked in the automobile industry As mentioned above, the automobile industry is supported and encouraged by many countries in the ASEAN The automobile industry in these countries generated some achievements, especially Thailand Now Thailand’s automotive industry is a key sector in the overall economy that account for 11.3% of GDP in manufacturing and employed 1.2 million workers in 2008 (Sirisuwanangkura, 2009) The local content rate is between 60% and 80% depending on the type of vehicles Since 2005, Thailand has become the largest production hub of ASEAN and rank number 14 in global production in 2008 To achieve these results, the government’s policies contributed a large part The study chose Thailand as a comparative object because Thailand and Vietnam are in the ASEAN region In the past, present and future, the WTO and regional commitments influence much to the automobile industries in Vietnam and Thailand Additionally, Thailand is an example of success in the development of the automobile industry in the ASEAN As known, these results in the automobile depend in large part on government policies Thailand has been successful in building industrial policies such as tariff and tax policies, local content requirements, supporting industrial development and cluster – based automobile industry development, while Vietnam’s policies have not promoted the domestic automobile industry This study does not focus on finding out these results in two countries It demonstrates the ways in which the policies have resulted in differences So, the study focuses on answering these following questions: Which policies influenced the development of the automobile industry in Thailand in the last years? Which policies used to support the development of the automobile industry in Vietnam? Why are not Vietnam’s policies effective to the automobile industry in comparison with the effect of Thailand’s policies? About methodology and collecting data: Almost data of the study is secondary data It is collected from various sources, such as the reports of Vietnam’s Ministry of Industry, the VAMA, the websites of automobile companies in Vietnam, the available data of the TAIA from its website, the articles about Vietnam automobile market information at Vietnam automobile Magazine and other sources About thesis restrictions: To write this paper, I put myself in the position of a policy maker And policy commendations only focus on the side of state and are to repair the government failures This paper is organized as follows The next section analyses the Vietnamese and Thailand’s automobile industries and explains the differences described above Section gives policy recommendations The final section concludes and summarizes THE AUTOMOBILE INDUSTRY Using the diamond model of Michael Porter, there are four decisive factors in the competitiveness of the industry as shown in Figure (Porter, 1998) It includes firm strategy, structure and rivalry, factor conditions, demand conditions and, related and supporting industries The role of government policies in this model is to affect the other four factors with a view to moving to higher levels of competitive performance These main policies include tariff and tax policy, localization, cluster-based development policy and supporting industry development Figure 2: Competitiveness Diamond Firm strategy, structure and rivalry Demand conditions Factor conditions Related and supporting industries Source: Porter, 1998 Government policies producing whole vehicles This means Vietnam wants to supply all parts in a vehicle The developing orientation of Vietnam is not suitable to integrative trend in this period Additionally, as mentioned above, Thailand’s policies has contributed a large part in generating the high local content rate and has built the automobile industry supplier network as a pyramid However, over nearly 20 years, there are a few companies setting up in Vietnam’s automobile industry And the local content rate is very low These results show that these policies have worked in Thailand’s automobile industry but not in Vietnam’s To understand why the differences exist, it is necessary to assess to impact of key policies and institutions in Vietnam 2.3.2 Explanation Firstly, the domestic market is shrunk by government policies, especially current tariff and tax policies As discussed above, the scale of Vietnamese auto market is small and segmented, with the sale of about 100.000 vehicles in 2008 and more than 17 assemblers An important reason making the domestic market shrink is current tariff and tax policies As discussed in 3.2.2, the domestic market is highly protected for locally produced vehicles by numerous incentives such as high tariffs on CBU, excise tax reductions, VAT and income tax exemptions, and other measures For instance, the protection rate for under-five-seat cars is up to 300% Since 2004, the government has decreased protection of the automobile industry, but protection remains high Nevertheless, investors still enjoy good conditions Tariff and tax policies are still very important factors for the government to manage the automobile industry at present and in the future But these policies in recent years have not supported the companies well At present, automakers are calling for lower excise taxes to protect local companies because the market scale is too small and segmented If excise taxes are high, the market scale is low and vice versa Decreasing tax and tariff incentives has led to increasing car prices and a reduction in the market scale Indeed, in recent years, to stimulate competition and implement global and regional commitments, the government has lightened protection by decreasing taxes and tariff incentives However, the response to the decrease in protection is different between domestic Vietnamese automakers and JVs Some domestic Vietnamese automakers have increased localization So even if there is an increase in tariffs on parts, they must not increase prices of their products to increase market share For example, Vinaxuki automaker has kept product prices the same even as the costs of materials and parts have increased (NN, 2007) However, for JVs, an increase in taxes and tariffs forces automakers to increase car prices and limits the market and disadvantages consumers In fact, JVs have not improved production to lower production costs They increased car prices following changing in taxes and tariffs (TBIC, 2008) In 2005 when the increase in excise taxes on five-seat cars was from 24% to 40%, the Toyota Vios increased to USD 27,000 from USD 24,800 and the Altis rose from USD 26,500 to USD 33,000 The price of cars increased one and a half times in comparison with that of 2003 after the new value added tax and excise taxes were applied The JVs said that they cannot be hold prices down because the local content rate cannot be raised If they are forced to produce parts locally by themselves, the price of cars will be much higher That has resulted in car prices rising and a smaller domestic market Figure shows the reduction in VAMA’s sale volume from 2004 to 2006 Obviously, the protection in recent years is not effective It can not help assemblers increase localisation The size of the domestic market is reduced not only by high car prices, but also by consumer behavior They delay buying cars to wait for the government’s policy adjustments hoping for reduced prices The tariff rate has changed from 100% before 2004 to 60% in 2007, 70% in March 2008 and 83% in April 2008 Thus, each time the government releases information on taxes and tariffs, the domestic market slumps Moreover, the government does not have a clear plan for implementing the provisions of trade agreements Lack of information on changes in tariffs on CBU vehicles to comply with the Common Effective Preferential Tariff (CEPT) among ASEAN countries and Vietnam’s World Trade Organization (WTO) agreement raises doubts among consumers VAMA’s sales volumes from 2004 to 2007 show this Therefore, the market remains small In addition, allowing imported cars, especially used cars, also influences the local automobile market This partly helps increase competition with locally-produced cars On the other hand, it decreases market share of local companies According to Vietnam Customs, the number of car imports increased to 16,831 units in 2005 while total sales of VAMA were 40,277 units, accounting for 41.8% This figure is about 12,000 units in 2006 in comparison with 40,897 units sold by VAMA Likewise, a large number of cars were imported to supplement the domestic market In short, to achieve economies of scale, the market scale is large enough However, in recent years, tariff and tax changes have slowed the growth of the domestic market So conditions are not good for the development of the automobile industry Tariffs and taxes have a negative impact on the automobile industry because of fluctuations, unreasonable rates and lack of a plan In the future, these policies will still be important to protect the automobile industry Thus, changing them is necessary Secondly, supporting industries in Vietnam have not developed, especially an autoparts industry to be able to localise production Each vehicle has an average of from 20,000 to 30,000 parts Thus, many autoparts suppliers are needed to produce a whole vehicle Each assembler needs a minimum of 20 suppliers However, up to now, there are a limited number of autopart makers including 30 domestic Vietnamese autopart companies and about 40 foreign invested autopart companies Many domestic Vietnamese autopart companies were established before the 1990s Their main task at that time was to repair and supply certain components and spare parts for imported autos They also repair, transform autos or produce products for other industries Like other developing countries in ASEAN, some JVs invested in parts production The others induced foreign autoparts companies to come to Vietnam in order to produce and supply to them This is the strategy of Honda, which is also the leader in localization in Vietnam A few domestic Vietnamese companies now also independently develop their own parts to localize rather than only depending on available autopart companies Although there are 11 JVs invested in Vietnam, autopart makers are not eager to invest because of the following reasons The first reason relates to current tariffs and taxes For a long time, the differential between tariffs on CBU and CKD vehicles has been too high This encourages automakers to import parts rather than produce locally or induce foreign autopart companies to invest in Vietnam Moreover, there are no tariff and taxes incentives for autoparts companies Up to now, the government also has made some adjustments in tariffs in order to stimulate local production of parts and components As mentioned above, the government imposed tariffs on separate parts instead of imposing tariffs on CKD sets At the same time, it also imposed reasonable tariffs to protect the parts and components that are being produced Data on “Current tariff and taxes” were compiled from articles about Vietnam automobile market information, Vietnam Automobile Magazine locally or need to be encouraged locally But the tariff rate is not higher than 30% However, the effects remain limited The second reason is high production costs As referred to earlier, the autoparts industry is closely related to many supporting industries, particularly mechanical industries Final products in the automobile industry require various kinds of supporting industries Supporting industries cover a very wide range of parts and components used in assembly of final products through the supply of parts and components or immediate goods This means that they have reciprocal influence However, at present, supporting industries for autopart production have not been developed Vietnam is originally an agricultural country Its mechanical industry has been developing for 50 years But its achievements are still limited Moreover, important materials, such as steel ingots and steel plates used in autopart production must be imported The result is that delivery costs make the price of materials high It is clear that the price of locally produced parts is higher if input prices are high A factor contributing to high production costs is the small output of autoparts market Foreign autopart companies try to find other markets for their products through exports Vietnamese autoparts companies must diversify production instead of focusing only on autoparts In addition, quality standards of autoparts remain a problem Domestic Vietnamese autoparts companies mainly supply parts to domestic Vietnamese automobile companies because they cannot satisfy quality standards of JVs, while foreign autoparts companies mainly provide products to JVs However, even parts that are accepted by some JVs may not be accepted by others Domestic Vietnamese automobile companies cannot accept products made by foreign automobile companies because of their high prices Therefore, the autopart market remains small Vietnam does not have a developed supporting industry, especially an autoparts industry Developing these industries is very important to localize production and develop the automobile industry Finally, Vietnam also has some policies, such as land, R&D, financing policies but they are not clear and useful Most industrial zones in Vietnam are located in favorable sites around major cities Land is not a problem For R&D policy, although the government plans to give financial support for research and development activities, no projects have been approved and financed Therefore, companies also not pay attention to these policies In summary, in recent years government’s protection is not effective It does not encourage the development of Vietnamese automobile industry So Vietnam needs adjust the existing policies to support the automobile industry 2.3.3 Lessons Over the past 40 years, the development of the Thai automotive industry had been based on import-substitution policies At present, interest has shifted toward more liberalized policies to correspond with current global trends These include lowering tariff barriers, abolishing local content measures, promoting investments and exports, and also cooperating with international bodies and trade groups, such as ASEAN, APEC, and WTO In the development process, Thailand’s policies focused on increasing localization and the development of the autoparts industry Nevertheless, systematic and step-by-step transition is much preferred so as to ensure that local industries will have adequate time to adapt themselves to an increasingly competitive environment Now Thailand is becoming the “Detroit of Asia.” Total production of vehicles is about 1.2 million per year Half of total production is exported Although up to now Thailand does not have a vehicle that is produced by Thai companies, it has built a part supplier network, with more than 700 autopart companies and 1,000 supporting companies This makes Thailand a base that supplies parts throughout the world By reasonable policies, Thailand chose to develop its automobile industry to participate in the automobile global value chain We can learn many lessons from Thailand’s automobile development path The following lessons are very important and necessary to develop the automobile industry Firstly, Vietnam must expand the scale of the domestic market as well as encourage production for export Secondly, enhancing the development of related and supporting industries is necessary to attract more foreign autopart companies Finally, tariffs and taxes should not fluctuate and should be reasonable in order to support local companies and increase competitiveness POLICY RECOMMENDATIONS: As explained in 2.3.2, current tariff and taxes policies made the market scale smaller Simultaneously, some government’s policies also does not encourage the development of the autoparts industry such as the regulations about CKD sets, tariffs on autoparts and lack of quality standards for autoparts Based on Thailand’s experience in developing its automobile industry and the current performances in Vietnam’s, Vietnam should have measures focusing on expanding market scale, developing the autoparts industry and increasing localization Vietnam has joined WTO and has therefore repealed local content requirement on vehicles In the global and competitive context, to develop the automobile industry Vietnam needs to adjust policies to achieve clear objectives and stability, and to encourage production of parts and assembly 3.1 Changing the current tariff and tax policy: Changes to this policy must pay attention to many aspects of the economy and guarantee fair outcomes for consumers and local producers In carrying out Vietnam’s international commitments, tariff and tax policies must provide reasonable protection for local companies, creating favorable conditions for imports, increasing competitiveness and expanding market scale Changing tariffs affects the trade balance and macroeconomic conditions in the Vietnamese economy In the medium and long run, tariffs are used to protect the infant automobile industry and contribute to the government budget However, in the short run, tariffs are a tool for controlling imports and the market In the global environment today, tariffs must be reduced gradually Reductions in tariffs and tax rates will increase the competitiveness and lower car prices This helps domestic markets increase in size So the developed automobile industry can compensate for lost revenues through income taxes, VAT and other fees As discussed in Section 2.2.2, implementing WTO, CEPT and AFTA commitments will be a great challenge to the automobile industry Therefore, Vietnam must formulate a plan to reduce tariffs from 2010 to 2018 These changes must be implemented gradually The final objective is the 0% of CEPT commitment in order to avoid trade bias The main function of the excise taxes is to regulate and guide consumers At current rates, excise taxes influence the prices of vehicles and the market scale As mentioned above, Vietnam’s market is small, with the sale of 100,000 units per year in many models and series This is an obstacle to localization So excise taxes must be designed to support one or a few models and series in which Vietnam has comparative advantage now 3.2 Development of related and supporting industries A vehicle consists of thousands of parts It is difficult for a company to make the all parts itself So having a developed autopart industry is very important to develop the automobile industry It is an indispensable condition in producing vehicles and is associated with local content policy and parts imports Therefore, Vietnam must determine which parts it should invest in, use locally and which companies can produce them Linkages are needed between assemblers and autopart companies These linkages will help expand market share of local parts for JVs and increase participation on the global autopart distribution system Experience about developing the automobile industry in some countries has shown that manufacturing a few parts or engines only achieves economies of scale only if volumes are large enough At present, there are few local part companies It is not easy to attract foreign autopart companies to invest in Vietnam Because market scale is so small, the autopart industry is underdeveloped as discussed above JVs cannot place an order with local companies, so they mainly import Firstly, a plan is needed to reduce taxes on parts and components in accordance with international and regional commitments In a specific period, tariffs can adjust in accordance with requirements of trade agreements However, if tariffs are used to reduce trade deficit, they must implement comprehensively for both vehicles and autoparts Secondly, tariffs should be eliminated for CKD sets Current export – import tariffs assign specific rates to CKD sets, separate parts and CBU vehicles Tariffs on CKD set are lower than on CBUs The results show that if Vietnam maintains this policy, local auto companies will not have an incentive to increase localisation and produce local parts Automobile manufacturing will remain at the assembly stage Simultaneously, it maintains reasonable protection rates on parts and components which can be produced locally and important parts for developing the automobile industry such as engines, gearboxes and axles Thirdly, the government must improve quality standards for autoparts in accordance with international standards in order to export and supply for both domestic Vietnamese automobile companies and JVs Finally, building the automobile industry cluster can promote the development of supporting industries and create a favorable environment for technical and managing learning 3.3 Development of infrastructure Along with rapid growth of the means of transport, the weak road traffic system causes traffic jams in the big cities, such as Ho Chi Minh city and Hanoi Hence, to develop the automobile industry, a measure is needed to step up investment in upgrading infrastructure, such as roads, parks, public traffic and traffic signals Enlargement of urban traffic routes must be planned systematically in the long run and forecast the growth speed of means of transport in the future CONCLUSION Vietnam’s automobile industry started in 1991, 30 years later than Thailand It has gained some modest achievements However, it must face many difficulties in investment, production, market, localization, and so on The local content rate is considered as the decisive point that has an effect on the other problems of price, development of the automobile industry and auto parts production At present, the Vietnamese auto industry is small and is still in the early infant stage of assembly with low value added products So Vietnam needs to combine many policies and achieve cooperation between government and firms in implementing policies Firstly, changing the current tariff and tax policy would create good conditions for attracting foreign autopart companies to Vietnam Secondly, enhancing the effect of localization and development of supporting industries reduces the cost of production Finally, building the automobile industry cluster creates spillover effects in technology, know-how and management REFERENCES Ba Banh transl (2006) “Living in hopes …,” Vietnam Automobile Magazine, Volume 43, March 2006, 49 Den Pha transl (2006) “Ten-year Vietnamese automobile policy: A undetermined end,” Vietnam Automobile Magazine, Volume 43, March 2006, 46 Den Pha transl (2007) “Feeling and presumption: Capricious destiny of Vietnamese automobile market,” Vietnam Automobile Magazine, Volume 62, October 2007, 92 Fujita, Mai (2002) “Chapter VI,” Industrial Policies and Trade Liberalization – The Automotive Industry in Thailand and Malaysia, APEC Study Center, Institute of Developing Economies Ga – rang – ti transl (2006) “Automobile story: half pleased, half worry,” Vietnam Automobile Magazine, Volume 43, March 2006, 47 Humphrey, J and Oeter, A (2000) “Auto industry policies in emerging markets: globalisation and the promotion of local industries,” In Humphrey J, Lecler Y and Salerno M eds Global Strategies, Local Realities: The Auto Industry in Emerging Markets Basingstoke, Macmillan: 42-71 Kohpaiboon, Archanun (2008) Thai Automotive Industry: Multinational Enterprises and Global Integration, Economic Research and Training Center, Discussion th Paper No 004, February 25 2008 Lecler, Yveline (2002) “The Cluster Role in the Development of the Thai Car Industry,” International Journal of Urban and Regional Research, Volume 26.4, December 2002, 799 – 814 N.N transl (2007) Vinaxuki does not increase the prices of trucks Available from http://www.giaothongvantai.com.vn/Desktop.aspx/Noi-dung/tin-tuc-sukien/Vinaxuki_khong_tang_gia_xe_tai/ 10 Ngo Van Tru (2009) “Segmentation of strategic vehicle: The necessity for Vietnam Auto industry development,” a paper presented at the Seminar on Segmentation of strategic vehicle, organized by Ministry of Industry and Trade, th Hanoi, October 2009 11 Nguyen Bich Thuy (2009) Industrial Policies as Determinant of Localization: The Case of Vietnamese Automobile Industry, Thesis (PhD), Waseda University 12 Nguyen Van Phung transl (2009) “Tariff and taxes for the automobile industry: How building?” Financing magazine, July 2009, 31 – 34 13 Ohno, Kenichi and Mai The Cuong (2004) The Automobile Industry in Vietnam: Remaining Issues in Implementing the Master Plan, Vietnam Development th Forum, December 28 2004 14 Porter, M.E (1998) The Competitive Advantage of Nations New York: The Free Press 15 Royal Danish Embassy (2006) Sector overview: The Automobile Industry in Thailand Bangkok, 2006 16 Sirisuwanangkura, Suparat (2009) “Experience of Thai Automobile Industry,” a paper presented at the Seminar on Developing a sustainable & viable Vietnam Automobile Industry & Experiences in some South East Asia countries, th organized by VAMA, HCM city, November 19 2009 17 Tan Duc transl (2009) “The Automobile Market: Many potentialities but lack of policies,” Saigon Economic Times, Volume 48, November 2009, 32 – 33 18 Thai An transl (2009) “Finding out exorbitant auto prices in Vietnam,” Nguoi lao dong Newspaper, December 2009 19 The Thailand Automobile Industry Association (2009) Database on line Available from http://www.thaiauto.or.th/Records/eng/records_menu_eng.asp 20 Trade and Business Information Centre transl (2008) The automobile supporting industry in Vietnam: Reality and Recommendation, Hanoi, March 2008 21 Tu Thuy Anh transl (2009) “Control trade gap and increase Budget revenue: Using tariff or excise tax?” Financing magazine, July 2009, 35 – 38 22 United Nations Economic and Social Commission for Asia and the Pacific, The changing nature of the Asian automobile industries Database on line Available from http://www.unescap.org/tid/publication/chap1_2212.pdf 23 Wad, Peter (2009) “The automobile industry of Southeast Asia: Malaysia and Thailand,” Journal of the Asia Pacific Economy, Volume 14.2, May 2009, 172 – 193 24 Zsin Woon, Teoh; Sathirathai, Santitarn; Lam, David; Chung Han, Lai and Chareonwongsak, Kriengsak (2007) Thailand Automotive Cluster Available from http://www.isc.hbs.edu/pdf/Student_Projects/Thailand_AutomotiveCluster_2007.pd f APPENDIX LIST OF ASSEMBLERS IN THAILAND S TT COMPANY NAME AUTO ALLIANCE (THAILAND) CO., LTD BANGCHAN GENERAL ASSEMBLY CO., LTD BRAND VEHICLE Mazda, Ford Pick – up Honda, Chrysler, Hyundai Passenger car Mitsubishi Passenger car, Pick-up, Truck Opel Passenger car Hino, Toyota Dyna Truck, bus Honda Passenger car MMC SITTIPOL CO., LTD GENERAL MOTORS (THAILAND) LTD HINO MOTORS (THAILAND) LTD HONDA AUTOMOBILE (THAILAND) CO., LTD ISUZU MOTORS COMPANY (THAILAND) LIMITED SIAM NISSAN AUTOMOBILE CO., LTD SIAM V.M.C AUTOMOBILE CO., LTD 10 THAI RUNG UNION CAR PUBLIC CO., LTD 11 THAI SWEDISH ASSEMBLY CO., LTD 12 Y.M.C ASSEMBLY CO., LTD 13 THONBURI AUTOMOTIVE ASSEMBLY PLANT CO., Mercedes Benz LTD Passenger car 14 TOYOTA MOTOR THAILAND CO., LTD Toyota Passenger car, pick – up 15 BMW MANUFACTURING (THAILAND) CO.,LTD BMW, Land Rover, Rover Passenger car Pick-Up, Truck, bus Passenger car, Nissan, Suzuki Pick-up, Truck Isuzu VMC Isuzu Pick-Up Pick-up/ Modifications Volvo Passenger car Peugeot, Volkswagen Passenger car Source: The Thailand Automobile Industry Association (retrieved data from http://www.thaiauto.or.th/Records/eng/records_menu_eng.asp, 10/2009) ... than Vietnam? ??s Foreign automakers in Thailand appeared thirty years earlier than in Vietnam Japanese producers have become global leaders in Thailand and Vietnam, with the first-tier firms that... present and future, the WTO and regional commitments influence much to the automobile industries in Vietnam and Thailand Additionally, Thailand is an example of success in the development of the automobile. .. such as the reports of Vietnam? ??s Ministry of Industry, the VAMA, the websites of automobile companies in Vietnam, the available data of the TAIA from its website, the articles about Vietnam automobile