Belarus Auto Maker Makes Inroads into Vietnam with Ambitious Plans

MAZ is planning to penetrate the Vietnamese market to tap rising demand for vehicles and the potential of a recent free trade deal.

Belarusian automobile manufacturer MAZ has unveiled ambitious plans to capitalize on Vietnam, one of the fastest growing automobile markets in the Southeast Asian region, according to Belarusian media.

MAZ intends to sell over $40 million worth of trucks to Vietnam every year, the company’s General Director Dmitry Katerinich told a delegation of the Vietnamese government led by Deputy Prime Minister Pham Binh Minh late last month.

During Vietnamese President Tran Dai Quang’s visit to Belarus last month, a contract allowing MAZ to sell 400 MAZ vehicles, comprising of 200 trucks and 200 assembly kits, worth $18.1 million to Vietnam was signed.

“Apart from that, we've received a quota for selling 750 assembled vehicles without duties within three years. We will also be able to ship 4,000 assembly kits without duties within five years,” said Katerinich.

This contract is aligned with a free trade agreement between Vietnam and the Eurasian Economic Union that came into effect on October 5, 2016.

Besides shipping vehicles to Vietnam, MAZ is working on setting up two joint ventures in the Southeast Asian country to assemble trucks (MAZ Asia) and passenger vehicles (MAZ Zenit). The MAZ truck factory is being built 40km away from Hanoi and is scheduled to start operation by the end of the year.

While the establishment of the joint venture to make MAZ buses is being discussed, the factory to assemble trucks is being built. The auto maker plans to assemble about 1,000 vehicles per annum for a value of over $40 million. “That is intended for the Vietnamese market alone. We have plans to sell products to the ASEAN market, too,” said Katerinich.

As accorded by the two governments, the share of local components in Vietnam-assembled MAZ trucks will be 40% by 2020. Thanks to the ASEAN Economic Community, MAZ will be able to sell the trucks in the ASEAN countries without customs duties.

The MAZ executive showed hope that the agreement on setting up the second joint venture will be signed soon. “We will make buses able to carry more passengers, low-floor buses specifically for large cities. After studying the situation, we decided we can sell about 500 buses of the kind to Vietnam every year — over $50 million per annum.”

Apart from MAZ, Belarusian automaker BelAZ plans to export ten dump trucks with the carrying capacity of 55 tons to Vietnam while the testing of 90-ton trucks still continues.

Tuan Minh / BizLIVE