|Cars manufactured at Thaco Kia Factory in the Chu Lai-Truong Hai Auto Complex in Quang Nam Province. Car engines will soon be produced locally. — VNA/VNS Photo Tran Tinh
DA NANG (VNS)— Truong Hai Automobile company (Thaco) planned to produce 20,000 diesel engines for trucks and buses from next year, the company's deputy general director Pham Van Tai confirmed yesterday.
The engine manufacturing plant, which began construction last year with an investment of US$185.5 million, would provide engines meeting Euro 2, Euro 3 Emission Standard.
Operation of the plant and the use of 55 per cent of components from local sources would reduce the sale price of trucks and buses in future, he added.
"We have sped up the localisation ratio to produce good quality and competitive price vehicles. Bus production comprises 55 per cent of locally made components including windscreens, chassis, seats and wire wares," Tai said.
"The coach is our best seller with 600 vehicles being bought last year, 95 per cent in the domestic market."
The Quang Nam-based automobile maker acquired a 51 per cent share in Korean Soosung Motor Technology company with a $3.5 million deal last year.
The company had previously exported components and spare parts for special purpose vehicle production in Soosung company.
"We exported locally made components worth only $500,000 last year. The share deal helps us produce cranes, dumps, concrete mixer trucks and tankers," said Thaco's mechanical engineering director Doan Dat Ninh.
Thaco has invested VND9 trillion ($428.5 million) in manufacturing plants producing cars, trucks and buses, as well as a sea port and a vocational college since 2003.
Last year, Thaco produced 24,500 vehicles with a total revenue of VND12 trillion ($571.4 million), contributing VND2.8 trillion ($133.3 million) to the State budget.
The company expects to provide 29,500 vehicles this year with a revenue of VND13 trillion ($619 million). Thaco, in partnership with French automaker Peugeot, will begin manufacturing the Peugeot 408 model this year.
The largest automobile maker in Viet Nam has produced and distributed three brand names including Kia of South Korea, Mazda of Japan and Peugeot.
Truong Hai Corporation has asked the Government to extend the deadline for paying its import tax bill of more than VND1.2 trillion (US$57 million) from July 1, 2013 to June 30, 2014.
The corporation, which imports completely knocked down parts (CKDs), is being supported by authorities in central Quang Nam Province, where four companies owned by Truong Hai (Chu Lai Truong Hai Auto, Truong Hai Bus, Truong Hai – Kia Coach and Vina-Mazda).
According to VnEconomy online newspaper, Quang Nam authorities and Truong Hai Corporation explained that the economic situation in Viet Nam and the declining world markets have led to sales dropping strongly for automobile manufacturers.
It has been reported that the corporation has an inventory worth more than VND3.3 trillion, while it owes about VND5.6 trillion to credit institutions.
Quang Nam called for the Government to support Truong Hai as it is a young domestic manufacturer trying its hardest to become competitive, especially before 2018 when the country is planning to fully join ASEAN Trade Freedom Agreement that will lead to import tax cuts encouraging regional manufacturers to enter the Vietnamese market.
Without investment, the company may collapse, resulting in the loss of thousands of jobs, they warned.
A Finance Ministry leader said the ministry has approved the corporation's proposal and asked the Government for permission to implement the postponement. The corporation will now have to wait for the Prime Minister's approval.
Even with this approval, the extension will only be granted if the corporation can provide a guarantee of support from commercial banks and promises that it will continue investing in automobile manufacturing.
The Quang Nam People's Committee would be responsible for managing and ensuring the money is used for the right purpose. — VNS