Supporting firms key to autos

16:18 | 30/05/2018 Car & Motor

The development of Vietnam’s automobile industry depends a great deal on its supporting industry, which needs to be developed comprehensively, experts have said.

VNA/VNS Photo

Speaking at a conference in HCM City on Thursday, Phạm Tuấn Anh, deputy director of the Ministry of Industry and Trade’s industrial department, said there are only around 300 manufacturers of car components out of the 12,000 supporting industry companies in Vietnam.

Around 90 percent of the 300 are foreign businesses, he said.

In the case of large vehicles, they are able to meet around 55 percent of the component demand, but manufacturers of smaller cars have to rely heavily on part imports since they can only source around 10 percent locally, he said.

The domestic companies mostly make simple components such as doors, wheels and wires, yet they are modest in terms of quality and variety and use inefficient machinery and production techniques, he said.

With their production size often being small, their prices are not very competitive either and so car manufacturers usually opt to buy from foreign-owned companies or import, he said.

Since the demand for vehicles in Vietnam is still relatively low, large international components makers are not interested in investing in the country, he said.

Dr Trương Thị Chí Bình, director of the Supporting Industry Enterprises Development Center, said with components costing more in Vietnam, the cost of manufacturing vehicles is higher here than in most other ASEAN member countries.

The industry aims by 2020 to meet 35 percent of local demand and achieve exports of US$4 billion. By 2035 it hopes to increase them to 65 percent and US$10 billion.

The speakers at the conference said the Government should focus on supporting these companies, help them invest in better technologies, provide more training and encourage them to acquire international quality certificates.

It should also help component and auto manufacturers link up and form partnerships, they said.

“The supporting industry is very important for the development of the automobile industry, and there is a lot more that the Government can do to facilitate their growth,” Phan Đăng Tuất of the Ministry of Industry and Trade said.

Theo VNS