Public policy with Vietnamese characteristics: the case of the motorcycle industry

ABSTRACT

This paper analyses Vietnam’s motorcycle industry, one of the industries earmarked for economic reform since the late 1980s. The paper argues that the Vietnamese state has nurtured its previously derelict motorcycle industry to one that is internationally competitive through the implementation of market-distorting policy measures as well as the selective co-optation of international capital. Nevertheless, there is a limit to Vietnam’s policy manoeuvring amidst strong pressure from the international agencies and transnational corporations to liberalize the industry. Consequently, indigenous capability remains modest although some of the domestic firms are displaying signs of mastering the technical know-how introduced from abroad.

KEYWORDS:

• Good governance
• public policy
• reform
• state-owned enterprise
• transnational corporation
• Vietnam

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

1. A CBU is a motorcycle fully assembled abroad and subsequently imported to Vietnam as a complete unit. The CBU directly contrasts the completely knockdown (CKD) motorcycles as the latter is a kit containing some pre-manufactured components needed to assemble a complete motorcycle. The CKD is usually only assembled at the final destination as TNCs typically sell CKD units to their foreign affiliates or licensees to avoid import taxes or reap other incentives.

2. In addition, this period saw the entry of the GMN Automobile and Motorcycle Parts Manufacture Joint Venture Co. Ltd., a Thai-led joint venture which left the market after a few years. Sufat, a Vietnamese private firm, also emerged during this period.

3. The motorcycle assemblers are expected to maintain at least 60% of local content in their production.

Additional information

Notes on contributors

Guanie Lim

Dr. Guanie Lim is a Postdoctoral Research Fellow at the Nanyang Centre for Public Administration, Nanyang Technological University. His main research interests are public policy, value chain analysis, Chinese investment in Southeast Asia, and state–society relations in Asia. Dr Lim is currently working on his monograph, which details the economic catching-up process of key Southeast Asian economies.