Support industry creates driving force for automobile sector

Supporting industry development will create a driving force for Vietnam’s automobile industry, as heard a seminar held by the Vietnam Association of Supporting Industries (VASI) in Ho Chi Minh City on May 24.

Pham Tuan Anh, deputy head of the Ministry of Industry and Trade’s Industrial Department, said supporting industry helps improve value of domestic goods and competitiveness of industrial sector, contributing to industrialisation and modernisation of the national economy. 

Over the past years, the government has offered a number of incentives to facilitate support industries in general and those in motorbikes-automobiles in particular. However, the rate of domestically-made products used in automobiles remains limited while Vietnam’s automobile manufacturing cost is higher than regional countries’. 

Anh said there are only about 300 supporting industry firms in automobiles manufacturing nationwide. Moreover, the cost of producing spare parts in Vietnam remains high, making it hard for domestic enterprises to compete with foreign rivals. There remains loose linkage between assembly firms and spare parts providers while domestic technological expertise is weak. 

Almost foreign assembly businesses in Vietnam import spare parts from parent companies or partner with foreign businesses. 

VASI Vice Chairwoman and General Secretary Truong Thi Chi Binh suggested support industry firms devise long-term strategies, enhance connectivity and actively join the global supply chain. At the same time, they should regularly renovate manufacturing up to international standards and cut costs to improve competitiveness. 

Vu Quang Tam, member of the Board of Directors of the Vietnam Engine and Agricultural Machinery Corporation, advised firms to regularly upgrade technology, enhance manufacturing capability, and establish close ties with major manufacturers to join the global value chain for a long term. 

He proposed waiving special consumption taxes on domestically-made spare parts as well as boosting manufacturing of basic materials such as steel, rubber and plastics, in service of automobile sector and other industries.

VNA

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