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Stuck in Neutral: Vietnam’s Automobile Industry Policy

Vietnam's automobile industry is undergoing transformational change as the country is pursuing global and regional economic integration. While this overall policy direction is unambiguous, sectoral policy suffers from contradicting policy objectives of different ministries, lacking coordination and clarity in government-industry communication. Analysis of policy measures indicates that Vietnam briefly sought to protect the automobile industry from liberalization, but quickly abandoned these measures as they proved to be ineffective. To allow Vietnam's automobile industry to develop further, it is suggested that the government must overcome internal conflicts, improve stakeholder participation and extend support to the supplier industry, which provides most inputs for vehicle production.