Driving Development? The Problems and Promises of the Car in Vietnam

Abstract

ABSTRACTThe private car comes with promises of modernity and comfortable mobility for the growing middle class in Vietnam. Vietnam’s government has also targeted the domestic automobile industry as a “spearhead industry” in an attempt to achieve industrial upgrading. Paradoxically, the government is simultaneously restraining the market for this industry through imposing high taxes and fees on cars, making them available only to a limited number of people. This article discusses the promises and problems of the automobile in Vietnam. It analyses policies related to the development of the automobile industry, and discusses the reasons for the relative failure of the project. The article argues that the failure is linked to weaknesses in Vietnamese development strategies, but also to the potential problems an expansion in car ownership in Vietnam would lead to. The article contends that the car represents a development dilemma between industrialisation and urban mobility, and that environmental, energy and social concerns add to the rationale for limiting car ownership. Furthermore, although forces promoting car-driven industrialisation appear to be gaining ground, the requirements for regional economic integration may challenge the future of the infant automobile industry.