Under Vietnam-EAEU Free Trade Deal, Russian Trucks to be Produced in Vietnam
Op/Ed by Chris Devonshire-Ellis
Maxim Akimov, the head of the Russian Intergovernmental Commission of the Russian Federation and Vietnam on Trade, Economic, Scientific and Technical Cooperation has announced that Russia’s GAZ Group will start to assemble vehicles in Vietnam.
Alimov stated that “The issue of cooperation in industry, including the assembly of automobiles from sets of machinery components in Vietnam, are agreed with the Vietnamese side.” He also noted that 300 sets of machinery components are being transported by sea.
Gaz is known for its heavy-duty trucks, which compete in global races such as the Dakar Rally.
Kristina Dubinima, Sales Director at Gaz International LLC in Asia, said in an interview with the Vietnam Economic Times that Gaz “Researched Vietnam’s market in 2016 and 2017 and late last year and this year participated in two exhibitions on the country’s automotive industry, to study customers. We have also conducted trade promotion activities in Vietnam and will start selling our products in the country this year. We plan to establish a joint venture with a Vietnamese company to benefit from import tariffs on spare parts and imported automobiles of zero percent.
We will also transfer technology and localize components in production. We expect to benefit from the Vietnam-Eurasian Economic Union Free Trade Agreement (EAEU FTA) signed in 2016 and we will set up a production base in Vietnam. From here we can export vehicles to other Southeast Asian countries. Vietnam signing many FTAs is an advantage for our investment in the country. As a manufacturer of commercial vehicles in Russia, Gaz is targeting Vietnam as a key market in the ASEAN region and it is also a key, long-term market of Russian automotive companies.”
The intended GAZ JV is as a direct result of Russia and the EAEU signing a free trade agreement with Vietnam two years ago. That has resulted in over US$10 billion of Russian direct investment into the country. Other ASEAN members such as Cambodia, Indonesia, and Thailand are also negotiating to join the EAEU.