Nguyen Thi Xuan Thuy, IIPS representative, (Source: VNA)HCM City (VNA) – The supporting industry for Vietnam’s automobilemanufacturing sector is still underdeveloped, heard a seminar on the industry’sdevelopment in the fourth industrial revolution in Ho Chi Minh City on March13.
According to theInstitute of Industrial Policies and Strategies (IIPS), Vietnam is one of thefive ASEAN nations manufacturing vehicles, besides Thailand, Malaysia,Indonesia and the Philippines.
Among the five, Vietnamranks third in population after Indonesia and the Philippines, but itsautomobile production output ranks fifth, with a yearly output of 300,000vehicles.
The country has 20automobile assembling firms, with 84 Tier-1 part suppliers and 145 suppliers ofTier -2 and 3. Meanwhile, Thailand has only 16 assembling companies, but thenumber of Tier-1 suppliers amounts to 690, and that of Tier-2 and 3 suppliers is1,700.
Nguyen Thi XuanThuy, IIPS representative, said that due to the small scale of Vietnam’sautomobile market, the costs for producing auto parts or components are high.Therefore, demand for domestically made parts is relatively low, constrainingthe development of the local supporting industry.
As a result,automobile assembly firms choose to use imported parts, creating a viciouscycle that remains unsolved, she stressed.
To untie the viciouscycle, Thuy proposed creating a larger market scale through importingcompletely built-up units (CBUs) in the first years and forcing manufacturersto find domestic spare parts with cheaper prices, thus stimulating the localsupporting industry.
Businesses shouldalso choose advantageous spare parts and products so as to gain assess to theASEAN production chain, she added.
Nguyen Duong Hieu,Chairman and General Manager of LIDOVIT Trading and Industrial JSC, suggestedlocal producers invest in upgrading their technology, and integrate managementsystems to better manage their production and approach the market.
He said thatmanagement agencies should provide local part suppliers with specificrequirements of foreign firms so they can prepare to meet their standards.
Delegates alsosuggested that the Government set up a website for businesses in the partsindustry so they can update their information, which would make it easier fordownstream producers, including foreign ones, to find parts suppliers.
The seminar was heldby the HCM City Department of Industry and Trade, the Board of Management ofSaigon Hi-Tech Park and HCM City Export Processing and Industrial ZonesAuthority. -VNA
VNA
