The output of domestically-produced automobiles and motorbikes increased by 23.7 and 21.8 per cent, respectively, during the first seven months of the year, reported the Ministry of Industry and Trade.

During the period, 1.95 million motorbikes were produced by domestic firms, which was an increase of 350,000 units over the same period last year.

The ministry said the domestic motorbike producers had finally increased their production capacity for the first time in seven years.

Domestic firms also manufactured 52,100 cars in the period, an increase of 10,000 units against the same period last year.

In July alone, the automobile output reached 8,500 units, which was an increase of 700 units over June.

However, Ngo Van Tru, deputy director of the Heavy Industry Department under the Ministry of Industry and Trade, said the domestic car industry was still facing a myriad of difficulties because the sector is weak.

In accordance with commitments on trade liberalisation made by Viet Nam under the framework of ASEAN/ AFTA (Asean Free Trade Agreement), by 2018 Viet Nam will have to fully liberalise its automobile market.

The ministry forecasts that by 2020, there will be 50 vehicles for every 1,000 people.

Viet Nam has 54 automobile manufacturers, including 12 foreign-owned and 42 domestically-owned enterprises.