Luong Duc Toan, Deputy Head of the Processing and Manufacturing Office of the Ministry of Industry and Trade’s Industry Agency said Vietnam’s automobile industry has developed quite rapidly over the past two years. In 2018, Vietnam produced and assembled more than 250,000 vehicles, meeting 70 percent of the domestic demand, Toan said. The industry has more than 40 automobile assembly and production enterprises, mostly small and medium sized businesses, he said.
According to Toan, the Vietnamese automobile industry has a low local content, and some products with a high local content have a low scientific and technological content. Every year, Vietnam imports more than US$3 billion worth of components and spare parts for automobile assembly and repair. The government of Vietnam has provided major incentives for automobile support industry investors, both domestic and foreign ones.
Many businesses have plans to increase capacity in Vietnam, including Toyota Vietnam. Mazda has a production plant with a capacity of 100,000 vehicles per year in Chu Lai, while Hyundai has cooperated with the Thanh Cong Group and will further increase production capacity, and Vingroup’s VinFast automobile project will increase its design capacity from 250,000 to 500,000 vehicles by 2025. It is good time to boost investment in Vietnam’s automobile support industry, Toan said.
Talking to the media on the sidelines of an April 18 seminar in Hanoi on Vietnam-Malaysia opportunities in automotive sector, Malaysian Ambassador to Vietnam Dato’ Mohd Zamruni Khalid said that the scale of Vietnam’s automobile market is smaller than in some other ASEAN (the Association of Southeast Asian Nations) countries, including Malaysia and Thailand. However, implementation of the ASEAN Trade in Goods Agreement (ATIGA) will help Vietnam become a promising destination for automobile investors from other countries, including Malaysia.
Moreover, Vietnam’s automobile investment promotion policies help attract Malaysian automobile suppliers and manufacturers. VinFast has also made Vietnam’s automobile industry more attractive, creating great opportunities for manufacturers and component suppliers to further explore the Vietnamese market.
Malaysian businesses want to cooperate with partners in Vietnam, and businesses from the two countries can establish strategic relationships and transfer technology transfer in this developing field in Vietnam, the ambassador said.
The Ministry of Industry and Trade is implementing a 2016-2025 support industry development program, approved by the Prime Minister, including connection of support industry enterprises with manufacturers. Malaysian businesses that want to reach the Vietnamese market can find, build and expand their cooperation, business and distribution networks through cooperation with manufacturers in Vietnam.