Local firms should enhance cooperation in developing support industries

Developing support industries must become regular activity, said experts. Automobile support industry is also in that operation law when the country is seeking ways to reduce trade deficit towards the modernisation and industrialisation process.

As reported, in Hanoi, there are now nearly 20 car producers and assemblers (including joint ventures and foreign invested enterprises). In which, the line of below 9-seat cars has about 50 types along with 37 types of over 80-seat cars.

Particularly, the trucks with the tonnage of 0.8 to five are manufactured and assembled at 10 enterprises. This product group is growing strongly in recent time so a lot of companies focus on production investment. However, most firms produce cars from all imported components with nearly the same technology level and low domestication ratio. The value added mainly comes from assembly phase and nearly 90 percent of automobile components are imported. As for the product line of sedan and 4-9 seat tourism cars, only FIEs join the assembly with the low domestication ratio. In details, the domestication ratio of Honda Vietnam is 10 percent, Toyota Vietnam 7 percent, and remaining FIEs 2-4 percent only. The ratio is lower in producing bus and trucks.

According to the automobile support industry development plan, the domestication ratio as for models of trucks and passenger cars is completed at 65 percent, sedans at 15 percent till the end of 2010, passenger cars 75 percent, trucks 85 percent, and sedans at 30 percent by 2020. As a strategy, Vietnam will focus developing support industry products such as cabin, frame, cover, motor, and gearbox.

In Hanoi, there are some facilities in supplying automobile accessories and components to carmakers. These suppliers initially are supporting to each other to lifting the domestication ratio. Especially, the car assemblers and producers also give high priority to invest in support industries. Pioneering in developing automobile support industry was Xuan Kien Automobile Joint Stock Co called Vinaxuki. Just as from being formed, the company has invested much in manufacturing automobile moulds such as single-press machine, load machine system with an ambition to build up a particular car brand name for Vietnam. Also Vinaxuki cooperated with Japanese experts to design and manufacture other sets of moulds. Thanks to this, Vinaxuki turned out the products with the domestication ratio of over 40 percent and the competitive price.

But the processing technology at some machinery companies remains limited along with unsustainable quality as well. Many moulds including tyre, glass and battery are not suitable to the standards on size.

Domestic car companies have to enhance cooperation to cut down the costs for component import, transport. Also, they should make big efforts to become the component suppliers of global well known car groups.

Hanoi moi

Tags: Vietnam automotive, Vietnam automotive industry