Automotive support industry strives to become spare part supplier
Production at Huyndai Thành Công, Ninh Bình. — VNA/VNS Photo |
With new policies in effect and businesses working to expand factories and assembly lines and gradually catch up with global trends, the Vietnamese automobile industry has achieved positive results.
In particular, the localisation rate is growing as more and more businesses invest in domestic car production.
New Government policies and increasingly clear trends in foreign investment flows all show a brighter picture for the car and motorbike support industries in Việt Nam.
According to data from the Ministry of Industry and Trade, the export turnover of electrical wire components reached about US$1.17 billion last year, accounting for 38 per cent of the export value of automobile components and ranking third in the world.
Vietnamese-made electrical wire products have become an important link in the global supply chain of automobile assembly materials.
Dr Trương Thị Chí Bình, deputy general secretary of the Việt Nam Association for Supporting Industries (VASI), said that the total value of automobile industry-related products has grown rapidly in recent years, up from a 12 per cent growth rate in 2018 to 25 per cent last year.
At the same time, firms looking to improve product value are focusing on producing component clusters instead of individual spare parts, starting with original equipment manufacturer (OEM) and moving towards original brand manufacturer (OBM) products, she added.
The Xây dựng (Construction) online newspaper quoted Nguyễn Công Quyết from the Việt Nam Automobile Manufacturers’ Association (VAMA) as saying that the Vietnamese automobile market has a lot of potential, thanks to a population of 100 million people and a rising average income.
However, the supporting industry is still in the first maintenance phase, with enterprises mainly producing low-value and non-competitive components, he said.
One of the main problems is the small size of the automobile market, leading to lower production and difficulty in developing the supply chain.
As for the development of the global auto industry supply chain in the context of adapting to climate change, the VAMA representative said that about 30,000 components were needed to produce and assemble a complete car.
The automobile industry therefore requires a large industrial foundation, he noted.
Dr Bình said that car component production in Việt Nam was divided into two branches: high-value activities, carried out by FDI enterprises and major domestic brands, and low-value activities, concentrated in small and medium-sized enterprises.
Many of them are falling into the 'low productivity trap'. Promoting a comprehensive transformation of this sector -- from purpose to process and people -- is therefore necessary, she noted.
According to the VAMA representative, the business community is waiting for a system of synchronous and breakthrough incentive policies to invest in the production and assembly of green vehicles.
The policies must encourage and mobilise the participation of all economic sectors in the country, promote cooperation with major global car manufacturers, and focus on improving companies' competitiveness to participate in the global automobile industry production chain, he emphasised.
At the same time, they must also improve competitiveness to become a supplier of components and spare parts in the global automobile production chain, creating a driving force to promote the economic restructuring of the whole country towards modernisation.
See also
Vietnam sees opportunities to attract investments in electronics support industries
12:37 | 17/11/2024 Support industries
North-South express railway – driving force to spawn new support industries
17:09 | 08/11/2024 Support industries
See more news
Vietnam: A new bright spot in global electronics supply chain
15:47 | 22/10/2024 Support industries
Ha Nam seizes opportunities to boost supporting industry development
15:15 | 07/10/2024 Support industries
Supporting industries catch new wave to make breakthroughs
17:00 | 03/10/2024 Support industries
Supporting industries a barrier to attracting FDI
09:43 | 30/09/2024 Support industries
Positive transformation: Supporting industries take on new responsibility
14:03 | 28/09/2024 Support industries
Da Nang to become high-tech and supporting industry hub
08:15 | 28/09/2024 Support industries
Hung Yen Province prioritizes high-tech and supporting industries
14:42 | 27/09/2024 Support industries
HCMC boosts supporting industry development
17:25 | 26/09/2024 Support industries
Southeastern localities develop support industries to modernise economy
17:33 | 21/09/2024 Support industries
Developing supporting industries needs to be a priority
11:37 | 14/09/2024 Support industries
Long Thanh Airport component project 4 urged to be on schedule
17:13 | 03/12/2024 Society
Specific plans announced to restructure Party apparatus
16:46 | 03/12/2024 Policy
Chinese media highlights Vietnam as attractive investment destination in 2025
16:38 | 03/12/2024 Investment
Indonesia extends safeguard measures on polystyrene products from Vietnam
16:34 | 03/12/2024 Trade
Party chief meets with Hanoi voters
16:22 | 03/12/2024 News and Events
Multimedia
Streamlining political system's organisational apparatus
10:17 | 03/12/2024 Infographic
Vietnam-Singapore Strategic Partnership
15:28 | 02/12/2024 Infographic
Local vibe at wholesale market
10:51 | 02/12/2024 Lifestyle
Government member for 2021-2026 term
08:58 | 02/12/2024 Infographic
Ancient house comes to life
16:30 | 28/11/2024 Culture
Specific plans announced to restructure Party apparatus
16:46 | 03/12/2024 Policy
Streamlining political system: Time does not wait
15:40 | 02/12/2024 Policy
Gov't urges stronger efforts in thrift practice, wastefulness prevention
15:14 | 02/12/2024 Policy
2-per-cent VAT reduction extended to the end of June
14:48 | 02/12/2024 Policy
Reviving nuclear power programme believed a correct policy
09:09 | 02/12/2024 Energy
Viet Nam to restart Ninh Thuan nuclear power project
20:27 | 01/12/2024 Energy
Wood industry aims at US$16 billion in export earnings this year
20:16 | 01/12/2024 Industry
Ministry proposes incentives for automobile industry to be extended to the end of 2027
16:27 | 30/11/2024 Industry
Chinese media highlights Vietnam as attractive investment destination in 2025
16:38 | 03/12/2024 Investment
Vietnam's readiness to receive semiconductor investment
18:07 | 01/12/2024 Investment
Nghệ An approves US$590 million fabric factory investment from Singapore
16:01 | 29/11/2024 Investment
Ha Nam grants investment license worth more than 2.6 trillion VND for Thanh Binh II Industrial Park project
09:28 | 29/11/2024 Investment
Central bank increases credit growth limit for banks for second time this year
18:43 | 30/11/2024 Finance-Banking
PM orders strengthening 2024 credit management
17:31 | 28/11/2024 Finance-Banking
Bac Ninh Province meets business needs for year-end loans
17:02 | 26/11/2024 Finance-Banking
Promoting credit for key agricultural sectors in Mekong Delta
11:11 | 25/11/2024 Finance-Banking
Việt Nam rattled by 458 earthquakes in 11 months
14:47 | 03/12/2024 Environment
Hà Nội determined to revive its polluted rivers
10:31 | 03/12/2024 Environment
Vietnam seeks stronger cooperation in hydrometeorological forecasting with Japan
10:23 | 03/12/2024 Environment
Releasing buoys to protect coral reefs in Cát Bà National Park
15:05 | 02/12/2024 Environment
Empowering Vietnamese firms with digital transformation
11:31 | 03/12/2024 Science - Technology
PM urges rapid technology mastery in renewable energy development
11:02 | 02/12/2024 Science - Technology
VN to embrace a new internet era: VIA
16:17 | 28/11/2024 Science - Technology
Global experts delve into earth, environmental sciences at int’l Vietnam confab
09:59 | 27/11/2024 Science - Technology
Long Thanh Airport component project 4 urged to be on schedule
17:13 | 03/12/2024 Society
Long Thành int'l airport must be completed within 2025: Gov't leader
16:11 | 03/12/2024 Society
Ministry of Construction mulls over $3.9 billion Government bond package for social housing
09:24 | 03/12/2024 Society
Bắc Giang looks to hire around 6,300 workers for semiconductor industry
15:10 | 02/12/2024 Society
Việt Nam's OCOP products debut at AF-L'ARTIGIANO IN FIERA 2024 in Milan
14:55 | 02/12/2024 Vietnamese Brands
Top 10 reputable logistics companies in 2024 announced
07:33 | 01/12/2024 Vietnamese Brands
150 products honoured as “Vietnamese Goods Loved by Consumers 2024”
11:34 | 29/11/2024 Vietnamese Brands
Phú Xuyên a land of hundreds of timeless crafts
10:12 | 27/11/2024 Vietnamese Brands
Vietnamese artisans bring unique handicrafts to Milan
11:35 | 03/12/2024 Culture
Hanoi Digital Pho gives experience of unique culinary essence
09:19 | 03/12/2024 Culture
Vietnam rises on global beauty map
10:45 | 02/12/2024 Culture
Broken rice and other Vietnamese dishes among the best rice dishes in Southeast Asia
14:15 | 30/11/2024 Lifestyle
Việt Nam, RoK expand tourism cooperation
11:40 | 03/12/2024 Tourism
Dong Thap boosts actions to protect forests in tandem with sustainable tourism
10:57 | 02/12/2024 Tourism
Travel + Leisure: Phu Quoc makes the list of 25 must-visit destinations in the world
11:28 | 29/11/2024 Tourism
Border tourism development enhanced through Magnificent Guangxi event
16:39 | 28/11/2024 Tourism