Vietnam's industry and trade ministry has requested the government to continue giving preferential treatment to the local automobile industry until 2018.
Vietnam will open the car market completely in 2018 under free trade agreements and local manufactures need to improve their competitiveness by then, the Ministry of Industry and Trade said.
According to local news website VietNamNet, the ministry has proposed high tax rates on imported cars and components that can be produced at home.
It also said the government should provide loans for bus and truck production projects that have high local content ratio and continue supporting local manufacturers in training and technology.
The government also needs to boost car consumption by providing interest rates subsidies to car buyers, the ministry said.
Taxes on passenger cars of less than nine seats and components imported from Southeast Asian countries will be completely removed in 2018.
Since the Vietnamese auto industry came into being in 1991 with the licensing of the first two joint ventures Mekong and VMC, it has benefited from many preferential policies.
However, analysts say local manufactures have not made full use of these policies to develop a strong industry and the industry is still having to import most of the components it needs.