Vietnam proposes extending 0% auto tax incentives to 2032

Vietnam's Ministry of Finance has completed a draft decree to extend the 0% tax incentive program for automobile production and assembly until the end of 2032. The proposal, which is being sent to the Ministry of Justice for appraisal, seeks to extend the current program that was originally scheduled to conclude in 2027.

The extension aims to provide long-term policy stability for domestic manufacturers to invest in technology, improve product quality, and integrate into global supply chains. This comes as the industry faces challenges such as low localization rates for vehicles under nine seats, an underdeveloped component ecosystem, and the global shift toward green vehicles.

According to the Ministry of Industry and Trade, there are currently over 40 automobile manufacturing and assembly enterprises in the country, including 16 large-scale companies. Domestic production has shown growth, with output reaching over 480,000 vehicles in 2025, a 30.4% increase from the previous year. For the first half of 2026, production is estimated to reach 284,600 vehicles, up 26.9% compared to the same period in 2025.