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Honda Vietnam to Resume Production

November 1, 2002

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HANOI, Vietnam (AP) _ Honda Vietnam said Friday it hopes to restart production soon, after the government announced it would allow the immediate import of 185,000 motorbike kits to enable foreign-invested assemblers to resume normal operations.

In early September, the government suddenly imposed an import quota of 1.5 million sets of motorbike kits for this year, down from 2.5 million kits imported last year, forcing major Japanese manufacturers, including Honda Vietnam and Yamaha Vietnam, to suspend production.

The government cited the soaring traffic accidents as the reason for the restriction, but manufacturers contended it was a protectionist measure to force them into buying more domestic parts.

Earlier this week, the government relented. It said that starting in January, it would allow foreign motorbike assemblers to import as many parts as they need to meet the production capacity stipulated in their investment licenses.

As a stopgap measure until then, it is now allowing the immediate import of 185,000 kits. One kit makes one motorbike.

Honda Vietnam will be allowed 110,000 kits, Yamaha Vietnam 17,000, Suzuki Vietnam 5,000, while the Taiwanese VMEP will be given additional 48,000 and Chinese Lifan 5,000 kits, an official of the Prime Minister’s Office said, citing a decision signed Thursday by Deputy Prime Minister Nguyen Tan Dung.

Honda Vietnam, a joint venture between Honda Motors and a local company, had suspended operations at its plant near Hanoi on Sept. 18 because it already produced more than the 280,000 kits specified under the restrictive quota.

Vietnam has 10 million motorbikes for its 80 million people, one of the highest per capita levels in the world. More than 10,000 people have been killed in traffic accidents already this year. More than 70 percent of accidents involve motorbikes.

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