Illustrative photo (Photo: VNA)
Vietnamese automobile firms can gain a competitive edge over their rivals in ASEAN if the domestic supporting industry uses more locally-produced parts, heard a conference recently held in Hanoi by the Central Institute for Economic Management (CIEM).
The Ministry of Industry and Trade said Vietnam has 358 automobile-related manufacturing enterprises, including 50 auto assembly companies and 308 auto part producers. The number of auto part producers is much lower than in Malaysia and Thailand, which have 385 units and 2,500 units respectively.
The industry produces simple parts such as components for chassis, trunks, cabinets, car doors, tires and tubes, radiators, brake lines, electrical wires and wheel rims, which have been shipped to Cambodia, China, Myanmar, Laos and the US.
Vietnam’s exports of automobile components and spare parts hit 3.5 billion USD in 2015. The figure rose to 3.9 billion USD in 2016 and more than 4.4 billion USD in 2017.
Experts at the conference described difficulty accessing capital as a major challenge to small spare part producers, as a car part production line costs tens of millions of USD. Meanwhile, preferential policies and support mechanisms have only been offered in the short-term and lack efficiency.
According to Deputy General Director of Toyota Motor Vietnam Shinjiro Kajikawa, Vietnam’s automobile development depends much on the growth of its support industry. Small automobile output and low localisation rate increase car production costs.
The cost to produce cars in Vietnam is 10-20 percent more than that of imported automobiles from ASEAN countries, he said.
Vietnam should draw up policies to aid the automobile supporting industry, making it more competitive in terms of quality, costs and delivery.
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