Malaysia explores investment opportunities in automobile sector in Vietnam

Vietnamese made VinFast cars are being shifted around the world to test for quality and safety - Photo courtesy of Vingroup

Speaking at the seminar discussing business opportunities between Vietnam and Malaysia in the automotive sector held in Hanoi on April 18, the diplomat said that the rise of VinFast - Vietnam’s first fully-fledged carmaker under the country’s largest private conglomerate Vingroup - has made the domestic automobile manufacturing industry more attractive, opening great opportunities for manufacturers and component suppliers to discover the auto market in Vietnam.

As the use of cars in Vietnam is still low compared to other countries in the region, the Malaysian ambassador stated that it is the chance for 15 Malaysian automobile enterprises coming to Vietnam this time to explore the opportunity together with their Vietnamese partners, thus establishing a strategic business relationship in the promising field.

Hoang Quang Phong, Vice President of the Vietnam Chamber of Commerce and Industry, also expressed his hope that the enterprises of the two countries would take advantage of development opportunities and exchange experience in the fields of auto components and parts which is the strength of the Malaysian side.

Luong Duc Toan from the Department of Legal Affairs under the Ministry of Industry and Trade, said that every year Vietnam still imports over US$3 billion worth of components and spare parts for automobile assembly and car repair.

In the last two years, Vietnam’s auto industry has developed quite rapidly. In 2018, Vietnam produced and assembled over 250,000 vehicles. The products meet about 70% of domestic demand.

Currently, there are over 40 enterprises involved in automobile assembly and production in Vietnam and most of them are small and medium sized enterprises, with design capacity of producing and assembling about 800,000 vehicles a year, but they are producing below the design capacity.

Toan said that Vietnam has huge potential to develop the automobile industry, however, it must attach itself to the regional and global value chains.

Therefore, the immediate priority for the industry is to deeply participate in this value chain, Toan suggested, pointing to three main focuses, including the healthy development of the automobile market, maintaining and promoting the domestic production and assembly of cars, and developing supporting industries to server the automobile sector. Policy solutions also need to be developed in support of the above three groups of solutions.