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Home / Deputy Prime Minister: Vietnam’s automobile industry has grown

Deputy Prime Minister: Vietnam’s automobile industry has grown

Date posted: 01/ 11/ 2018 - The poster: admin

In the past two years, Vietnam’s automobile industry has grown, said Deputy Prime Minister Truong Hoa Binh.

In the past two years, Vietnam’s automobile industry has grown, deputy prime minister Truong Hoa Binh said in a joint report on the implementation of resolutions on the questioning of the National Assembly from the beginning of the term.

On 30 October, the National Assembly began its interrogation at the sixth session, lasting for three days.

A summary report on the implementation of the National Assembly’s resolutions on specialized supervision and questioning from the beginning of the term to the end of the fourth session of the National Assembly was briefed by Deputy Prime Minister Truong Hoa Binh First session.

After a general overview, the Deputy Prime Minister informed about the results of each specific field, including industry and industry with requirements for the development of the automobile industry.

Deputy Prime Minister said that in order to develop Vietnam’s automobile industry, the Government issued Decree No. 116/2017 / ND-CP dated 17 October 2017 stipulating conditions for production, assembly and import. and car service and maintenance. The Prime Minister has instructed the establishment of an interagency working group to evaluate the implementation of the Strategy and Master Plan for the Development of the Vietnamese Automobile Industry. The working group has worked with Vietnam’s automotive industry, clearly define the plan for production development of each enterprise in the period 2018-2020; To summarize difficulties, obstacles and proposals of enterprises and propose solutions to remove and support enterprises.

In the past two years, the Vietnamese automobile industry has grown, Deputy Prime Minister stressed.

Further information is provided in the report to implement the policy on developing key mechanical products. The Prime Minister also issued Decision No. 319 / QD-TTg dated March 15, 2018 approving The development strategy of Vietnam’s mechanical industry up to 2025 with a vision to 2035, with a list of key mechanical products from 2017 to 2025 with priority given to development investment.

The Government and the Prime Minister have instructed the Ministry of Industry and Trade to assume the prime responsibility for, and coordinate with the concerned ministries and branches in, evaluating the successful implementation of branch strategies and reports.

Also submitted by the Government to the National Assembly, separate reports on industry and trade provide more detailed information on the implementation of planning development of the automobile industry and key mechanical products.

To demonstrate that Vietnam’s automobile industry has developed rapidly in the past two years, this report states that in 2015, for the first time, the production and assembly of automobiles in the country will reach over 200. thousand vehicles / year, the speed increase compared to the year of 2011 reached 51%. In 2016, production continued to increase strongly, reaching over 283.3 thousand vehicles / year. Some kinds of products have been exported to Laos, Cambodia, Myanmar, Central America … The automobile industry has contributed billions of dollars to the State budget, contributing to reducing trade deficit. It also creates direct employment for more than 120 thousand workers.

By 2018, the domestic automobile industry has about 173 manufacturing and assembling enterprises, of which 56 are manufacturing vehicles from spare parts and 117 from the base. Most of medium and small enterprises. Some inland businesses have been involved in the global automotive chain. The total installed capacity is about 500,000 units / year, of which foreign invested sector accounts for 47% and 53% respectively.

There are many large manufacturers operating in the country, meeting about 70% of domestic demand, with total output of the passenger car market of 210,000 units / year in 2016, of which output About 160 thousand cars.

For types of trucks, passenger cars of 10 seats or more, locally-made special-purpose vehicles, which have achieved high localization rates, have met the targets set basically to satisfy the domestic market (small trucks 7 tons meet about 70% of the demand, with an average localization rate of 50%, passenger cars of 10 seats or more, specialized vehicles meet about 90% of demand, with the localization rate of 45 % to exceed the target compared to the plan).

However, the Government also mentioned a number of limitations, such as the automobile sector has not yet created the cooperation – cooperation and specialization between the enterprises in the manufacture – assembling cars and parts production. No system of raw materials suppliers and components production has been formed so the localization rate of some vehicles is still lower than the target.

Therefore, in the coming time, domestic automobile manufacturers should have effective solutions to improve the localization rate and strengthen the cooperation between domestic and foreign enterprises in production. Components and spare parts, focusing on important components, high technology content (engines – gearboxes – actuators) … to serve the needs of the domestic market, replacing imported export to export.

In terms of localization rates for individual vehicles to 9 seats, the target is 40% by 2005, 60% by 2010, but only 7% to 10% on average. Thaco reaching 15 – 18%, Toyota Vietnam 37% for Innova line alone, lower than the target. The products have been localized with low technological content such as tubes, automobile tires, seats, mirrors, glasses, wires, batteries, plastic products … Up to 80 – 90% Main raw materials for the production of components such as alloy steel, aluminum alloy, plastic resin, high-tech rubber are now imported. Molding materials must also be imported. Annually, enterprises have to import about $ 2 to $ 3.5 billion of components and spare parts for production, assembly and repair of vehicles.

According to the Government, the weak capacity of enterprises in the supporting industries is also worth attention. The mold makers either do not have a large scale or lack coordination for development. The casting industry and casting details for the industry are not high and the rate of defects is high, not meeting the requirements of the industry.

At present, the localization rate of countries in the middle region has reached 65 – 70%, Thailand reached 80%. Thus, if the domestic car manufacturers do not soon have effective solutions to improve the localization rate, it will certainly be difficult to compete with the regional market when the AFTA takes effect, the Government assessed.

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