After many years of struggling to develop, many Vietnamese automobile manufacturers have changed their thoughts about the way they need to follow to develop. Instead of dreaming of owning a car line “made in Vietnam”, they now want to join some important links in the global car production chain.

Automobile industry development strategy fails

In 2004, the Prime Minister released the Decision No 177 on the strategy to develop the Vietnamese automobile industry by 2010, with the vision until 2020; under which, Vietnam would gradually increase the locally made contents in finished cars, and then it would strive to develop Vietnamese brands automobiles.

However, Deputy Minister of Industry and Trade, Le Duong Quang, has affirmed in a workshop reviewing the six-year period of the implementation strategy, that nearly all the targets set in the strategy have not been fulfilled so far.

Quang said “that the percentage of locally made contents in products remains very low. Especially, the most important parts of the cars cannot be made domestically.”

Automobile manufacturers have not been making deep investments in  production, even though the market scale has become larger. More than ten years ago, the market was quite small with just 5000-7000 cars consumed a year, while the figure has now soared to 100,000.

Despite the market scale enlargement, the car prices have been increasing year after year. Meanwhile, automobile joint ventures voice the same complaint that the tax rates are overly high, and the market is too small. As a result, the car sale prices in Vietnam have always been high if compared with the prices in regional countries and the world.

Most of the well known automobile brand names have been present in Vietnam. However, their factories in the country only do the assembling of the car parts. The car parts have been mostly imported from other countries, because there are only 100 enterprises which can provide car parts to the assemblers, and the enterprises can only make simple parts.

Which way to follow?

After many years of struggling to develop, many Vietnamese automobile manufacturers have changed their thoughts about the way they need to follow to develop. Instead of dreaming of owning a car line “made in Vietnam”, they now want to join some important links in the global car production chain.

The new way of thinking by some enterprises proves  contrary to the development strategy set by state management agencies. However, many domestic enterprises believe that manufacturing a car from A to Z is really an overload of work and unfeasible, while they will be able to “live well” if they focus on making some parts of the car.

Tran Ba Duong, Chair and General Director of the 100 percent Vietnamese owned Truong Hai Thaco Automobile Enterprise, said that no need to strive to manufacture a car from the beginning to the end.

“We would strive to join the global production chain by providing high quality and competitive products,” Duong said.

He went on to say, that at the Chu Lai Open Economic Zone developed by Truong Hai Thaco, three automobile assembling factories and 17 car part factories are now also prioritizing the production that goes this way.

Some analysts also think that making completed automobiles proves to be a too ambitious plan of Vietnam, which is now beyond the capability of Vietnamese enterprises. Therefore, Vietnam should focus on making the products within reach instead of striving onfar away goals.

Source: TBKTVN