Vietnamese multibillion-dong auto factory near death
21-04-2015 20:51:31+07:00
Vietnamese multibillion-dong auto factory near death
Many years ago, Vinaxuki made its way in the world, greeted with applause from state management agencies, which vowed to develop a Vietnamese automobile industry. But the automobile factory, symbolizing the Vietnamese dream of making cars, is dying quietly.
However, Vinaxuki has incurred a huge debt of VND1.2 trillion, while the factory has stopped operation for the last three years because of lack of capital.
Huyen had to sell over 5,000 tons of scrap iron and old machines in the last three years to get money to pay his workers. The number of workers has been cut from 1,160 to 200. The Japanese specialists Huyen invited to Vietnam to help build made-in-Vietnam cars have gone.
The 12-hectare factory built with trillions of dong has been left idle, where workshops are surrounded by grass. The imported robots worth millions of dollars are covered with dust. The tires for sedans were placed in a long queue. The vehicles, planned to be churned out in 2011-2012, stayed unfinished because of lack of capital.
Vinaxuki planned to launch its first sedan model, called VG, into the market. This model, according to Huyen, only consumes 6 liters of petrol for every 100 kilometers of travel. It is powerful and capable of travelling on rural and mountainous roads.
The car was expected to be affordable for Vietnamese, priced at VND360-390 million. An imported car of the same kind is sold at VND500-600 million.
However, in order to fulfill the VG plan, Vinaxuki needs VND20 billion more to import machines and equipment, and VND50 billion working capital.
As such, Huyen’s dream of VG-150 sedans with 50 percent of locally made content, remains on paper.
Many years ago, Huyen was warned that he was taking a risk pouring money into an automobile manufacturing project. However, Huyen still moved ahead with his plan, partly because he was encouraged by the Ministry of Industry and Trade, which also dreamed of developing a Vietnamese automobile industry.
However, many proposals were rejected, while policies on automobile industry development changed regularly.
Analysts say that Vietnam’s automobile industry development strategy has failed.
However, Huyen, in an interview with a local newspaper, said he will never give up the Vietnam-made automobile dream. He is planning to sell 50 percent of the factory’s stakes to get money to pay debts. Some South Korean investors have shown interest in the deal.
