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Vietnam Mercedes-Benz factory could close altogether on licence extension delays

A Mercedes-Benz factory in Ho Chi Minh City may need to cease operations from August 31 if an extension to the project’s licence is not granted, Tuoi Tre is reporting. The news outlet has cited a letter sent to the Prime Minister by Mercedes-Benz Group AG which is currently operating the factory.

The factory has already started to scale back production in anticipation of a closure. This includes laying-off workers and reducing working hours, according to the aforementioned article.

This challenge looks to stem from regulations that require the Ho Chi Minh City government to reclaim the land at the end of the lease and reassess its use case. Reportedly there is no way around this with the Ho Chi Minh City government asking the national government for assistance.

What is perhaps most concerning, however, is that it has been suggested that if the factory were to close it is unlikely to reopen with Mercedes-Benz to be imported instead.

See also:  What’s Going On with Vietnam’s Car Market in 2024?

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