According to a report by Tuoi Tre Online, during a meeting with General Secretary and President To Lam on the afternoon of August 17, after hearing about the issues faced by the joint venture between Mercedes-Benz Group AG (MBG AG) and the Saigon Transportation Mechanical Corporation (Samco), the General Secretary and President concluded: “The irrationality in the Mercedes joint venture is unacceptable.”
Specifically, the Mercedes-Benz car assembly plant in Ho Chi Minh City is a joint venture between Mercedes-Benz Group AG (MBG AG) and the Saigon Transportation Mechanical Corporation (Samco), which was licensed to operate in April 1995. According to regulations, the project will expire in April 2025 after 30 years of operation.
In September 2021, the company submitted a proposal to extend the project’s operation by five years, until 2030. Although the Ho Chi Minh City administration approved the extension in principle and agreed to extend the land lease, the procedures have not been completed yet.
Photo: Mercedes-Benz car assembly plant in Vietnam
Mr. Phan Van Mai, Chairman of the Ho Chi Minh City People’s Committee, said that the administration had struggled for five years due to several shortcomings and limitations in current laws, including the Law on Urban Planning, the Law on Public Investment, the Law on Investment in the Form of Public-Private Partnership (PPP), and the Law on State Budget…
The Chairman of the Ho Chi Minh City People’s Committee requested a specialized session to promptly address the issue. Regarding legal revisions, Mr. Phan Van Mai suggested that it should be linked to stronger decentralization and empowerment of local authorities. This would not only resolve the issue faced by Mercedes-Benz Group AG but also provide a solution for other similar projects.
The General Secretary and President, To Lam, emphasized the significant economic contributions of automotive projects, noting that, on average, a car manufacturer contributes at least VND 5,000 billion to the local budget annually.
Budget revenue statistics from several provinces highlight the significant contributions of automotive manufacturers to local economies. For instance, in Ninh Binh province, the Thanh Cong Auto Group contributed nearly 80% of the budget revenue from the non-state economic sector in 2023. In 2022, Hyundai Thanh Cong contributed VND 13,117 billion to the state budget, accounting for 67.8% of the total domestic tax revenue for that year (VND 19,324 billion).
In Quang Nam province, the budget revenue in 2023 was VND 23,951 billion, with nearly VND 16,000 billion coming from the Thaco Group, including over VND 11,100 billion in domestic taxes and over VND 4,700 billion in import-export taxes. In 2022, Thaco Group’s tax contribution to the provincial budget was VND 24,600 billion, including domestic and import-export taxes.
Vinfast, with its vehicle and motorcycle assembly plant in Cat Hai district, Hai Phong, has been the largest taxpayer in the region since 2019. Honda and Toyota are the top taxpayers in Vinh Phuc province, contributing significantly to the provincial budget for many years.
“It is unacceptable to revoke licenses after the market entry period and then require companies to start the process anew. I will do my part to address these issues,” affirmed the General Secretary and President.
