A Malaysian company has won a licence to manufacture trucks and buses in central Vietnam through a US$70 million (RM266 million) joint venture, officials said Friday.

"We have obtained a licence for the joint venture between Malaysia's JRD Motor Vehicle Co. Ltd and central Phu Yen province's Industrial Production and Import Export Company," Le Van Thanh, the Vietnamese company's director told

"When the factory is ready in about one year's time, capacity will be 10,000 trucks and 5,000 buses a year," he said, adding that up to 70 percent of the vehicles would be for export and the rest for local sale.

Last year, sales of automobiles assembled in the country were down by six percent, totalling 40,141 cars, trucks and buses, according to the Vietnam Automobile Manufacturers Association, which is made up of 11 foreign-invested companies.

Tax hike

Automakers have blamed the depressed market on the government's decision to hike a special consumption tax (SCT) on vehicle sales.

At the start of this year, SCT on cars was raised from 24 percent to 40 percent, forcing automobile makers to increase their prices by between eight percent and 42.6 percent.

Car ownership remains the preserve of the wealthy elite and emerging upper-middle class in Vietnam.

The market for buses is increasing more rapidly as the authorities seek to develop public transport to ease traffic congestion.