Thaco, VinFast, TC Group Petition to Keep Auto Sector as Conditional Business

Overview

Three of Vietnam’s largest automakers—Thaco (Truong Hai Group), VinFast (VFS), and TC Group (Thanh Cong Group)—have jointly petitioned the Prime Minister and relevant ministries to keep automobile manufacturing, assembly, and import as a conditional business sector. This move opposes a Ministry of Finance proposal to remove the sector from the list of conditional business lines, which the companies argue could compromise quality, safety, and fair competition.

Key Facts

• Thaco, VinFast, and TC Group jointly petitioned the Prime Minister, Ministry of Industry and Trade, and Ministry of Finance.
• The Ministry of Finance proposed removing auto manufacturing, assembly, and import from the conditional business list as part of a broader deregulation effort.
• Thaco argues the auto industry is a foundational sector affecting multiple industries, public safety, health, and the environment.
• VinFast warns that deregulation risks allowing underqualified firms to enter the market, potentially harming consumers given the high value and technical complexity of automobiles.
• TC Group contends that removing conditions would create unfair advantages for importers over domestic manufacturers who have invested heavily in facilities and supply chains.
• The Ministry of Industry and Trade previously noted risks including a potential influx of simple assembly FDI projects from countries with overcapacity like China.
• The petition emphasizes that current conditions ensure manufacturer responsibility throughout the vehicle lifecycle, including warranty, maintenance, and recall capabilities.

What Happened

In response to a Ministry of Finance draft proposal to simplify business conditions by removing automobile manufacturing, assembly, and import from the conditional business list, three major Vietnamese automakers have submitted a joint petition to the Prime Minister and relevant ministries urging them to reconsider. The companies argue that the auto sector’s unique characteristics—high quality requirements, long product lifespan, and significant impact on public safety and the environment—warrant continued regulation.

Thaco stated that the conditions are not administrative barriers but necessary safeguards to ensure product quality and manufacturer accountability. VinFast emphasized that physical and technical requirements demonstrate a firm’s serious, long-term investment commitment. TC Group highlighted the risk of unfair competition if importers face lower barriers than domestic manufacturers who have made substantial investments in local production.

Market Context

VinFast (VFS) is listed on the Nasdaq, while Thaco and TC Group are privately held. The petition reflects the domestic industry’s concern over potential policy shifts that could reshape competitive dynamics. Vietnam’s auto market has seen growing foreign investment and increasing competition, with domestic players investing heavily in localization and supply chains. The Ministry of Finance’s deregulation proposal aligns with broader government efforts to cut red tape, but the automakers warn it could undermine the industry’s development.

Strategic Significance

The petition underscores the strategic importance of regulatory conditions in protecting domestic manufacturing investments. For VinFast, which is scaling global operations, maintaining conditions in Vietnam ensures a level playing field against imports and supports its domestic production base. For Thaco and TC Group, the conditions validate their capital-intensive investments in local assembly and supply chains. The outcome will signal the government’s commitment to nurturing the domestic auto industry versus prioritizing deregulation and market openness.

What to Watch

• Official response from the Prime Minister and ministries to the petition.
• Any revisions to the Ministry of Finance’s draft proposal on conditional business lines.
• Potential impact on VinFast’s domestic production and export strategy if conditions are removed.
• Reactions from foreign automakers and importers regarding the regulatory environment.
• Subsequent policy announcements on auto industry development and localization incentives.