The newspaper quoted a source as saying that the company had asked local authorities to recommend a suitable location for the plant. “The site may be in Hanoi or one of its neighboring provinces,” the source said.

Vina-Mazda, a member of the Truong Hai Auto Co., opened a factory last October to assemble Mazda sedans in the Chu Lai Open Economic Zone in the central province of Quang Ngai.

This facility had an investment capital of VND750 billion (US$35.7 million) and will be capable of assembling 20,000 units per year by 2016.

If the project is materialized, it will help the development of an automobile industry that is yet to take shape in the country, the newspaper commented, noting that joint ventures here have only imported car components for assembly.

Truong Hai Auto communications officer Le Hoang Lan declined to provide any detailed information.

The US$185.5 million Chu Lai-Truong Hai engine manufacturing factory, the construction of which started in June, is the only engine production project in the country at present. It is expected to turn out 20,000 engines per year when it goes into operation.

Germany’s Robert Bosch Co also has a factory which produces driving belts for car gear-boxes with investment capital of 100 million euros (US$130 million), an amount expected to be raised to 230 million euros (US$299 million) by 2015, but all of its products are exported to Japan.

Deputy Prime Minister Hoang Trung Hai said national strategies prioritized the development of mechanical products which could take part in global production networks and value chains, as well as helping foster domestic support industries.