Low level of car production holds back Vietnamese auto part suppliers

Low level of car production holds back Vietnamese auto part suppliers

Auto parts manufactured at a Vietnam Motors and Agricultural Machinery Corporation factory. Photo baotintuc.vn

Vehicle elements created at a Vietnam Motors and Agricultural Equipment Company manufacturing unit. Image baotintuc.vn

HÀ NỘI — 50,000 cars for every yr is the minimal creation degree needed for the growth of the Vietnamese car section sector. Regretably, number of vehicle producers in Việt Nam have attained these kinds of a degree.

Only Toyota and Hyundai crossed the threshold in 2021, with 64,172 and 56,028 cars, respectively.

Meanwhile, Kia fell brief of the threshold with just 35,181 automobiles. VinFast followed with 34,746 and Mitsubishi with 26,346.

Trương Thị Chí Bình, an expert at Vietnam Institute of System and Coverage for Sector and Trade, underlined the small stage of car output as a setback for the Vietnamese automobile element marketplace.

She claimed low creation meant low demand from customers for domestic auto sections, discouraging suppliers from investing in new generation traces.

With out new manufacturing traces, the suppliers develop into much less competitive in price tag as they cannot obtain economies of scale.

Therefore, vehicle producers have to uncover their automobile parts somewhere else.

“Since car manufacturing is insufficient to motivate domestic vehicle areas output, lots of car producers have no selection but to import their inputs,” Bình said.

The qualified thinks that Việt Nam should introduce favourable procedures to improve the expansion of the domestic marketplace.

If not, Vietnamese suppliers will be priced out of the current market by overseas opponents.

The standard director of a Japanese auto producer shared the watch. He pointed out that auto areas charges in Việt Nam are two to a few instances bigger than individuals in other regional countries.

Vehicle producers in Thailand invest in just 10 for every cent of automobile parts from abroad. They get the rest from close to 3,000 Thai suppliers.

In the meantime, car producers in Việt Nam have to import 80-85 for each cent of auto sections, efficiently lowering the variety of Vietnamese suppliers to around 300.

The basic director called for much more favourable procedures to motivate domestic output of vehicle elements, particularly medium-sized steel and plastic pieces.

Two authorities at the Faculty of Economics, Vinh University, discovered that on common, an automobile producer purchases automobile parts from two domestic suppliers.

With over 90 for every cent of suppliers in Việt Nam becoming FDI companies, Vietnamese firms take up a minority.

According to the Vietnam Sign up, 318,704 vehicles ended up offered and registered in Việt Nam in 2021, better than the figures in 2020 (296,634) but lessen than in 2019 (322,322). — VNS

https://vietnamnews.vn/financial state/1166036/lower-stage-of-automobile-manufacturing-retains-back again-vietnamese-car-aspect-suppliers.html

By Viet Nam Information

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