The Ultimate Guide to the Mercedes-Benz Factory: Will the Iconic Plant in Gò Vấp Face the Axe?

In a recent development, Mercedes-Benz Vietnam Co., Ltd. (Mercedes-Benz Vietnam, located at 693 Quang Trung Street, Go Vap District) sent Document No. 310/MBV/2024 to the Ho Chi Minh City People’s Committee, highlighting their difficulties and requesting an early land lease extension for their car assembly project in Go Vap District until 2030.

The land lease term and the project duration in Go Vap District are set to expire on April 13, 2025. The company submitted their extension request back in 2021, but nearly three years later, the project’s lease remains unresolved.

The biggest obstacle to extending the land lease is the uncertainty over whether the project land falls under the scope of Decree No. 167/2017/ND-CP, which governs the rearrangement and handling of public assets.

Previously, the Mercedes-Benz Group AG sent a “letter of concern” to the Prime Minister, calling for intervention to finalize the lease extension and prevent the potential closure of their manufacturing facility in Vietnam.

In this letter, they outlined the current challenges and expressed concern that if the extension is not granted by the deadline of August 31, 2024, they would have to shut down their Go Vap plant.

Specifically, without an extension, the company would need to complete the assembly of existing parts inventory and prepare for the permanent cessation of operations at the Go Vap plant from January to March 2025.

This would also entail informing employees, business partners, distributors, and suppliers about the closure of the Mercedes-Benz Vietnam joint venture after a long period of operation in the country.

However, the Mercedes-Benz brand is committed to maintaining its presence in Vietnam, transitioning from domestic vehicle assembly to importing cars from ASEAN, Europe, and the USA, leveraging the benefits of free trade agreements.

Mercedes-Benz is seeking the Prime Minister’s support in directing relevant ministries to prioritize the completion of the project extension before August 31, 2024, to avert a potential crisis for the business.

With its large-scale production and advanced technology, Mercedes-Benz Vietnam has been a significant contributor to Ho Chi Minh City’s budget, averaging over VND 5,500 billion annually. Additionally, the company provides employment for approximately 800 people, contributing to the city’s socio-economic development.

According to our sources, Mercedes-Benz Vietnam is a joint venture between the Saigon Transportation Mechanical Corporation (Samco, holding 30% of the charter capital) and Mercedes-Benz AG Group (owning 70%).

In 1995, the Prime Minister issued a decision to retrieve a 10.5-hectare land lot at 693 Quang Trung Street, Go Vap District, for the joint venture to lease and build a factory. The company was granted an investment license with a term corresponding to the 30-year land lease, starting from April 1995 and expiring in 2025.