Second-hand vehicle assembly pla nts in Laos are eyeing closure due to a shortage of raw materials, after the government imposed import restrictio ns on second-hand parts.
Senior officials from the ministries of Industry and Commerce, Public Works and Transport, Planning and Investment, and Finance reached an agreement on Friday to temporarily halt the import of parts for second- hand vehicles for the purpose of reassembly.
Second-hand vehicles on sale in Vientiane.
The meeting, which was chaired by Minister of Industry and Commerce Dr Nam Vinhaket, also agreed to set up a taskforce to examine whether the government should permanently abolish second-hand vehicle assembly plants.
The number of vehicles in Laos has increased rapidly in recent years, due to the cheaper price of vehicles and higher disposable incomes.
“The taskforce will examine the positive and negative impacts of second-hand vehicles in Laos,” said one official who attended the meeting.
The official also said some people opposed the presence of second-hand vehicle assembly plants as they believed the growing number of older vehicles would pose long term development challenges.
A large proportion of imported second-hand vehicles are in a dilapidated condition, as they are often sourced from wrecking yards in neighbouring countries. It does not make any sense for Laos to use such vehicles, which consume a large amount of fuel and create excessive air pollution, he said.
According to the Ministry of Industry and Commerce, vehicle assembly plants need to get permission from car makers to reassemble vehicles in Laos, to protect the copyright of manufacturers, with copyright protection being one of the main preconditions to Laos gaining World Trade Organisation membership.
The senior official said that although many people wanted the government to abolish second-hand vehicle factories, some people still considered the industry necessary to ensure low income earners have the chance to own vehicles, which are critical to many rural industries.
He said most Lao people simply couldn't afford to buy a new vehicle, with prices far exceeding family incomes.
The Association of Second-hand Vehicle Assembly Factories in Vientiane said factories were no longer allowed to import second-hand vehicle parts for reassembly purposes, as the government has imposed import restrictions.
Factory operators said it was impossible for factories to gain copyright approvals from car makers such as Hyundai as the vehicles were second-hand. They said the end of second-hand vehicle assembly would have a severe impact on their business.
At present, there are seven such factories in Laos, employing about 2,000 workers. Factory owners have invested a lot of money in their construction, and if they are banned from doing business they will face a heavy debt burden.
