In the context of the supporting industry playing an increasingly important role in the automation capacity and competitiveness of Vietnam’s manufacturing industry, many domestic enterprises have been proactive in technology, human resources and supply chains. 

To support the development environment, the formulas as well as the new directions of mechanical enterprises created in any deep transformation of the supporting company, the reporter of the Industry and Trade Newspaper had an interview with Ho Ngoc Toan, Deputy General Girector of Automech Mechanical Equipment and Solutions.

Reporter:Although it was only established in 2020, Automech has consulted on manufacturing solutions and provided equipment to more than 500 partners in mechanics, automation, sheet metal, steel structures... including many big brands such as Hoa Phat, VinFast, TC Motor, Rang Dong. Can you share your experience and methods to help Automech participate in the supporting industry, approach and gradually join the supply chain? Why do businesses choose to invest in this field? During the implementation of projects, how has Automech received support from management agencies?

Ho Ngoc Toan: Automech was established in 2020, right when the Covid-19 pandemic broke out strongly, but the enterprise chose the challenging path of supporting industry and especially mechanical engineering. According to Automech, mechanics is the foundation of every industry. Any field that wants to develop needs to master machinery and production technology. If agriculture wants to be modern, it must produce agricultural machinery.

If the electronics industry wants to expand, it must take the initiative in equipment, production lines and technologies for manufacturing components. Therefore, mechanics is considered the starting point of industrial autonomy. Only when mastering the design, manufacturing and production of components and machinery systems, can other industries accelerate, expand and increase the added value.

From the very beginning, Automech chose the fastest approach: partnering with major manufacturers and technology companies from Europe, Japan, South Korea and China. The company brought advanced machining technologies to Vietnam and supplied them to domestic mechanical factories. Over the years, Automech has built a network of more than 500 customers, who are not only buyers of its equipment but also form the foundation for establishing a supply chain in the mechanical engineering sector.

Human resources are also a key pillar. Automech proactively collaborates with universities, providing machinery and equipment for training while welcoming students for internships. In doing so, the company helps guide career paths for young engineers and develops a workforce with skills aligned with the practical needs of the mechanical engineering industry.

After building its customer ecosystem and technology supply base, Automech invested in developing its own manufacturing plant. Here, the company focuses on producing complex component assemblies that were previously almost nonexistent in the domestic market. Beyond individual products, Automech provides complete component packages, including molds, jigs, fixtures, and auxiliary parts, forming a fully finished product. This model is then introduced to mechanical manufacturers to encourage them to upgrade their products, increase added value, gradually raise the localization rate and reduce dependence on imports.

Throughout its development, Automech has received support from the Vietnam Association of Supporting Industries (VASI). Through VASI, the company has opportunities to connect with numerous partners, participate in standard training programs and join overseas technology study tours. This indirect yet meaningful support has contributed significantly to strengthening the company’s competitiveness.

At the local level, the process of investing in and converting the factory in Bac Ninh has been assessed as smooth. Procedures for changing the investment purpose and obtaining the investment certificate were handled quickly, enabling Automech to stabilize production just one year after implementation.

Reporter:With your experience working with many domestic companies and FDI partners, how do you assess the current advantages and limitations of Vietnam’s supporting-industry enterprises? To maximize their strengths and overcome their weaknesses, in your opinion, what solutions should these businesses focus on?

Ho Ngoc Toan: Automech has a major advantage because it supplies machinery and equipment to more than 500 companies, giving it a clear understanding of the domestic production landscape. According to the company, Vietnam’s supporting industries have three key advantages: extremely high production flexibility; a young engineering workforce that adapts quickly to new technologies; and an expanding ecosystem driven by strong investment from major corporations in the mechanical, automotive and consumer goods sectors.

However, domestic enterprises also face four major constraints: small scale, limited capital, slow compliance with international standards and technological weaknesses. Most factories cover only a few thousand square meters, making expansion difficult. Limited financial resources lead to prolonged or fragmented investment in facilities and equipment, increasing financial risks. Achieving international standards such as IATF 16949 takes considerable time and Vietnamese firms often lag behind FDI suppliers. In terms of technology, many factories previously relied on outdated machinery, preventing them from participating in export markets; although the past five years have seen a shift toward investing in new equipment, only about one-fifth of enterprises have sufficient financial capacity.

Another weakness is the lack of industrial design capabilities, which means many companies remain stuck at the processing stage and have yet to master product design. This results in dependence on raw materials and difficulty in increasing added value.

Automech believes that to enhance supporting-industry capacity, enterprises need to take a more proactive approach to innovation, strengthen research and development, adopt digitalization, and continuously update technologies to meet standards and market demands.

Reporter:In the time ahead, what is Automech’s development orientation and what does the company expect from central and local authorities? From a business perspective, what recommendations do you have for stakeholders to further accelerate the growth of supporting industries?

Ho Ngoc Toan: Automech has operated its first factory in Bac Ninh for one year and is now investing in a second facility, also in Bac Ninh, because the province offers a favorable supply chain, supportive administrative procedures, and a high quality workforce. The company hopes the local authorities will continue to improve processes and guidance so that construction and investment procedures can be carried out more quickly.

Automech recommends that the Government, the Ministry of Industry and Trade, and local authorities consider establishing clusters or industrial zones dedicated specifically to domestic supporting industry enterprises. This would create concentrated supply chains and increase their contribution to the local economy, instead of relying heavily on FDI resources.

The company aims to become a leading player in this ecosystem. Automech has established a technology and innovation center at its plant to showcase new technologies, host workshops and test production processes to demonstrate their effectiveness, thereby encouraging businesses to invest more strongly in manufacturing and technology. Automech hopes central and local authorities will continue to provide strong support to promote the development of supporting industries in the coming period.  

Reporter: Thank you very much!