China's Lifan pursues new plant in Vietnam

HA NOI — China-based motorcycle and automotive manufacturer Lifan Group hopes to go ahead with its planned car assembly plant in Viet Nam, in spite of the current difficulties facing the south-east Asian country’s general economy and its automobile sector in particular.

Lifan plans to invest US$50 million in a factory that would be capable of producing 50,000 cars per year, said Lu Jiang, Lifan’s official responsible for the Viet Nam project. The Chinese company submitted an application for an investment licence to the Ministry of Investment and Planning (of Viet Nam) six months ago, but they are still waiting for it, said Jiang.

The factory, which will be developed from an existing assembly line, will be put into full-operation three months after receiving the licence, he said.

Lifan has refused to reveal who is partnering their project. However, the company has previously co-operated with the Viet Nam Motor Joint Venture Company and the Bao Toan Company to assemble cars in Viet Nam. This was restricted to 20-40 units per month, though.

Viet Nam’s car market has suffered declining sales due to the State’s decision to increase car taxes and fees. But, Lifan still believe that the domestic car market has long term potential, as the country develops economically and standards of living rise.

The Vietnamese factory has many advantages, including the State’s preferential policies for car producers, low labour and production costs, and favourable conditions for exports to other ASEAN countries, Jiang said.