Support industries speed up automobile sector

11:26 | 07/12/2016 Industry

(VEN) - According to a development orientation by 2025, with a vision to 2035, the automotive industry will attract preferential policies to support enterprises with vehicle manufacturing projects for capacity of over 50,000 units a year and those specializing in producing engine parts, gearboxes and transmissions, contributing to promoting the development of support industries.

Low local rate

The Ministry of Industry and Trade’s Heavy Industry Department said that the automotive industry consisted of over 400 enterprises by 2015, mainly focusing on the Southeast Vietnam and Red River Delta with most of them being small and medium-sized enterprises. This industry recorded an average growth of about 17 percent a year during the 2001-2014 period.
The Vietnamese automotive industry’s total capacity for production and assembly stands at 460,000 units a year with most of them being sedans (200,000 units), vans and passenger cars (215,000 units). However, the local rate in production of under nine-seat passenger cars has not achieved its targets.

Support industries for the automotive sector have been formed, but almost all of them provide only simple assembly with low technological content such as mirrors, glasses, chairs, sets of wires, batteries, tires and tubes and plastic items.
The basic raw materials such as steel, rubber and plastics are imported. Therefore, automotive parts and components have little competitive advantage due to high production costs.

More investment incentives

The automotive industry will create more incentives to enterprises with vehicle manufacturing projects for capacity of over 50,000 units a year and those specializing in producing engine parts, gearboxes and transmissions in the coming time.
The industry will develop under nine-seat passenger cars suitable with Vietnam and development trend in the world such as environmentally friendly vehicles.

In terms of vans and passenger cars, the industry will focus on the development of advantageous vehicles and those serving the agricultural sector such as multi-purpose vans, midrange and short-range passenger cars, concrete trucks, tank trucks and multifunctional agricultural vehicles.

The development of support industries serving the automotive sector requires further cooperation between domestic and foreign enterprises in the production of components and spare parts, especially important parts with high technological content in order to serve the needs of the domestic market, reduce imports and increase exports, Heavy Industry Department Deputy Director Pham Tuan Anh said.

Anh Lan