|
Honda keen to expand business in Vietnam
Japan’s auto giant Honda wants to move its factories from China to Vietnam to take advantage of lower production costs and preferential policies for foreign investors in the country.
Honda’s production costs in China are rising, including labour costs (Which are expected to double this year) and investment in new technology. In addition, the firm has been hit hard by consecutive strikes in many of their factories in China as well as in factories that produce spare parts for Honda.
The fact that the Chinese currency - the yuan - has been getting stronger against the US dollar has added to Honda’s problems, eroding its profits. Honda is not alone.
Vietnam and India have become new major destinations for many other investors in China.
The company plans to increase its inventory of auto parts by 24 percent to meet its manufacturing demand as its supplies of these products in China have been battered by waves of wage strikes.
The issue for Vietnam is how to absorb more foreign investment while safeguarding people’s quality of life and protecting the environment.
vov
|
