DECISION

ON APPROVAL OF THE PLANNING ON DEVELOPMENT OF VIETNAM’S MOTORBIKE INDUSTRY IN 2006-2015 PERIOD, WITH THE 2020 VISION TAKEN INTO CONSIDERATION

THE MINISTER OF INDUSTRY AND TRADE

Pursuant to Resolution No. 01/2007/QH12 dated July 31, 2007 of the first session of the XII th National Assembly of the Socialist Republic of Vietnam on organizational structure of the Government and the number of deputy Prime Ministers of the Government in the XII th terms;

Pursuant to the Government’s Decree No. 86/2002/ND-CP dated November 5, 2006 defining the functions, task, powers and organizational structure of the ministries and ministerial-level agencies;

Pursuant to the Prime Minister’s opinions at Document No. 3174/VPCP-CN dated June 11, 2007, assining the Minister of Industry to consider, and approve the Planning on development of Vietnam’s motorbike industry in 2006-2015 period, with the 2020 vision taken into consideration;

At the proposal of the director of the Mechanical Engineering, Metallurgy and Chemicals Department,

DECIDES:

Article 1. To approve the Planning on the development of Vietnam’s motorbike industry in 2006-2015 period, with the 2020 vision taken into consideration with the following principal contents:

1. Development viewpoints:

- To develop the Vietnam’s motorbike industry in conformity with the Planning on the development of the national industrial development planning, provincial/municipal socio-economic development plannings and the national road transportation development planning up to 2020;

- To develop motorbike manufacturing and assembling establishments synchronously with the development of subsidiary industrries towards modernization in order to raise the competitiveness of these production establishments and to meet the domestic and export demands.

- To develop the motorbike industry with meeting the standards and regulations on products quality, road safety, environmental protection, intellectual property protection and ensuring the harmonization of the interests of consumers,the society, the State and enterprises.

- To develop subsidiary industries is a central task and criating a premise for development of other assembling industries.

2. Development objecttives

a) Overall objective

To build and develop motorbike industry in order to make Vietnam by 2015 a regional competitive center for large-scale design, manufacture and assenbly of motorbikes for fully integrate in the regional and international markets.

b) Specific targets

* For the period up to 2015:

- To meet 100% of the demand for popular motorbikes in the rural areas and 90% of the demand for motorbikes in the urban areas;

- To strive for the domestic production rate of scooters of over 60%, and of the popular gear motorbikes of over 90%;

- Motorbike products will meet exhaust emission requirements according the roadmap committed by Vietnam under current regulations;

- To manufacture over-125cc motorbikes, luxury scooters, sport motorbikes and 3-or 4-wheel motorbikes for the disable people, tourist all-terrian motorbikes, and motorbikes for the transportation of agricultural produce, etc., to meet domestic and export demands; these kinds of motorbikes are set to account for over 30% of the industry's total output by 2015;

- To strive for about US$ 400 million in export value of motorbikes and spare parts ;

- To develop the motorbike production subsidiary industries into international competitive one which will actively participate in manufacturing and supplying motorbike components and spare parts for international motorbike groups.

* For the 2016-2020 period:

- To research into and manufature various kinds of motorbike engines using clean fuels for domestic and export markets;

- By 2020, to strive for US$500-800 million in export value of motorbikes and parts, 15-20% of which will be clean fuel motobikes;

- The motorbike industry's subsidiary industries can basically meet the demand for parts and accessories of a number of other assembly industries such as electric, electronic, automobile industries and consumer industrial products.

3. Planning on the development of motorbike industry

a) Forecast for the domestic market’s demand

- By 2010, the total number of opeatring motorbikes all over the country is expected at around 24 million, with an average annual increase of 2.0-2.2 million;

- By 2015, the total number of opeatring motorbikes all over the country is expected at around 31 million, with an average annual increase of 2 million in this period;

- By 2020, the total number of opeatring motorbikes all over the country is expected at around 33 million, with an average annual increase of 1.8 millionin the 2016-2020 period.

b) Orientations on production and product development

- To step up cooperation, joint venture and parnership to raise the competitiveness of small and medium enterprises in assembling and manufacturing motorbikes and their parts and accessoties;

- To actively diversify the products and manufacture parts and accessories for other industries such as automobile, consumer engineering, electronics, chemicals, plastics, etc., to use more effectively the existing material and technical facilities.

c) Research and deployment activities (R&D)

- To speed up the reasearch and development activities in various forms (self-doing, partnership, design perchase, etc.) depending on the capacity and conditions of each enterprise in the orientation of developing high-quality kinds of motorbikes.

- The State may provide support from science and technology funds for design and trial manufacture of a number of motorbike models, training and technology transfer according to the current provisions of law.

d) Development of subsidiary industries

- To work out the detailed planning on the development of subsidiary industries for the motorbike industry and serving as basis for enterprises to work out their development orientations in the future;

- To set up a database on the subsidiary industries combining with business brokerage services for FDI and domestic enterprises;

- To accelerate the development of input materials industries for manufacture of parts and accessories;

- To invest in building one or two supporting industrial parks in Northern and Southern key economic zones to attract investment in subsidiary industries. In addition, to encourage investment in subsidiary production establishments in the areas around the existing motorbike manufacturing and assembling enterprises.

4. Solutions and policies on implementation of the planning

a) Investment orientations

- To encourage the cooperation, and production division among motorbike enterprises to take use of invested technologies and equipment to reduce new investment costs and avoid overlapping investment;

- The newly invested projects must comply with the orientations stated in the approved Planning and Strategy on the development of motorbike industry, use advanced technologies and protect intellectual property rights and meet the standards on exhaust emission requirements and ensure the quality of products to meet the market demand.

b) Development of the subsidiary industries

- To attract investment in five key subsidiary industries, namely processing by pressure, casting, welding, thermal treatment and mold production;

- The Ministry of Industry and Trade shall assume the prime responsibility in the setting up of databases for the subsidiary industries before 2010.

- To promote and make full use of the training programs funded and carried out by domestic and foreign organizations;

- To encourage the development of associated training programs with the participation of FDI enterprises and domestic suppliers.

c) Development of scientific and technological capabilities

- To push up the financial aids from scientific and technological funds for projects to develop research and deployment capabilities; raise the capacity of part and accessoriesproduction and develop the production and develop the manufcature of clean-fuel engines and motorbkies;

- To encourage enterprises to build their own trademarks and product designs by funding the prchase of production rights or designing of product models.

d) Improvement of the organizational structure and operation of Industrial associations

- To improve and bring into full play the principal role of motorbike association in rallying and raising the quality of products, and production development capabilities of motorbike part assemblera and suppliers in Vietnam.

e) Product quality improvement and environment protection

- To formulate and apply the unified standards on quality, safety and environment in conformity with international ones.

- To encourage all economic sectors to develop motorbike examination and maintenance systems.

- To control and assemble the exhaust fumes treating equipment for used motorbikes, which have operated for over 5 years.

f) Protection of intellectual property rights

- To enhance enforcement of the Law on Intellectual Property; push up the industrial property protection and motorbike quality registration;

- To shorten the time limit for the protection of Intellectual Property. to qualify to the utmost assessments on industrial design differences;

- To encourage the establishment of the independent appraising organizations, which have adequate professional capacity, prestige and material facilities for the enforcement of the Law on Intellectual Property.

g) Market development

- The Industrial associations shall uphold their role in creating close links and cooperation among motorbike enterprises to raise the quality of products and develop the system of subsidiary industries .

- To accelerate the trade promotion, enhance the international cooperation in seeking and taping export markets; raise the cooperation with international associations and multi-national motorbike manufacturing groups in order to increase the direct or indirect export of parts and accessories.

h) Urban traffic and traffic safety

- To study, supplement and improve provisions of the Law on Road Traffic to enhance the transport safety in the management and use of motorbikes.

- To enhance the propagation and compulsory education on road traffic safety, especially the manufacture and use of motorbikes.

Article 2. Organization of implementation

1. Responsibilities of the Ministry of Industry and Trade:

- To coordinate with concerned ministries and branches and the People’s Committees of the provinces and centrally-run cities in directing the development of the industry according to the approved planning.

- To coordinate with the ministries of: Planning and Investment; Finance; Public Security; Science and Technology; Environment and Natural Resources; Transport, etc., to work out programs on supporting organizations, enterprises and localities in the deployment of approved Planning; propose mechanisms and policies for the development of motorbike industry.

- To set up the Planning on automobile and motorbike subsidiary industries up to 2015, with the 2025 vision taken into consideration.

2. The People’s Committees of the provinces and centrally-run cities, on the basis of the approved Planning, shall have to create favorable conditions for the development projects and programs of the motorbike industry to be synchronously implemented and conformably with the Master Planning on socio-economic development of the localities.

3. Professional associations of concerned branches shall coordinate with the Ministry of Industry and Trade in the implementation of the Planning by providing information and guidance for enterprises of the motorbike industry all over the country to have orientations and plans for the development of production and business in conformity with the Planning.

To research and propose the State management agencies to adjust policies and mechanisms to develop the motorbike industry according to the Planning.

Article 3.

This Decision shall take effect 15 days after its publication in CONG BAO.

Article 4.

Ministries, ministerial-level agencies, government-attached agencies, provincial/municipal People's Committees, and concerned agencies shall have to implement this Decision.