ABSTRACT
This chapter provides an historical perspective on Vietnamese automotive development, which can be classified into three phases. The first phase (1990–2006) is the era before joining the WTO. The second phase (2007–2017) is after joining the WTO and following its rules. The third phase (2018–present) is of tariff-free trade under the ASEAN Economic Community. Vietnam is a latecomer in the automotive industry. There was state production of military vehicles in the country from the 1950s, but the modern automotive industry dates only from the early 1990s, some 30–40 years behind the other ASEAN vehicle producers. Following Vietnam’s doi moi programme of economic reforms in 1986, and the country’s opening to foreign investment, many foreign automotive assemblers invested in Vietnam in the early and mid-1990s. WTO membership involved various rules outlawing the use of local content requirements, and other ‘TRIMs’, and also required ‘national treatment’ for foreign investors, outlawing imposing on them different rates of tax compared to domestic producers. In such an environment, the Vietnamese government in 2018 started using a complicated set of non-tariff barriers in order to protect their domestic automotive industry. There is now significant expansion by a large domestic vehicle producer.
