TOKYO (AFP) - Daihatsu Motor Co., a unit of the Japanese auto giant Toyota Motor, said Monday it will withdraw from manufacturing cars in Vietnam, blaming high taxes in the booming economy.
Daihatsu, a small car specialist, said it will wind up Vietindo Daihatsu Automotive Corp (Vindaco), a joint venture with local partners in which the Japanese firm holds a 26 percent stake.
"Given the size of the compact car market in Vietnam and changes to the consumption tax system there, we decided to withdraw from the country," Daihatsu spokesman Hiroshi Maruyama said.
About 110 employees in Vietman will lose their jobs, he said.
Vietnam's car market is very small but developing fast, with sales in the first five months of this year up 85 percent.
Japanese automakers have long complained about taxes in Vietnam. The Hanoi government since 2003 maintained high taxes, especially on import parts, in an effort to boost its domestic car makers.
Japan's Nikkei business daily said Daihatsu plans to concentrate its resources on Indonesia after pulling out of Vietnam. The spokesman declined to comment.
Daihatsu in the last fiscal year said that sales in Asia, mostly Malaysia and Indonesia, accounted for more than 20 percent of its revenue.
