Development gap hinders linkages in APEC auto industry

Hanoi (VNA) – A big development gap between APEC member economies is hindering the region’s auto industry from transferring technology and promoting linkages, said an official of the Vietnamese Ministry of Industry and Trade (MoIT).

Addressing the opening ceremony of the 26th APEC Automotive Dialogue (AD26) in Hanoi on May 11, Le Huu Phuc, Director of the MoIT’s Department of International Relations, said that APEC should give priority to assisting developing economies in boosting the auto industry.

He called for APEC member economies to cooperate effectively in capacity building to study auto industry policies, focusing on priority areas such as market access, human resources and infrastructure, technology incentives as well as environment standards for sustainable development.

Regarding the fourth industrial revolution, Phuc said it will lead to the restructuring of the global manufacturing system, not only in technology but also in management and placing of new business models.

New technology trends may disrupt value chains, possibly shifting a significant part of global production from developing to developed countries, he said, adding that access to end markets will likely become more critical than access to resources.

According to Phuc, with the fact that the auto industry’s annual growth of 4-6 percent largely due to the flow of FDI mostly within the APEC region, the improvement of the market and investment climate will continue to be the most important factor for the APEC auto industry.

AD 26 was held as part of the second APEC Senior Officials Meeting (SOM 2) and related meetings. At the dialogue, delegates discussed the real situation of the auto industry and auto market in APEC member economies as well as the impacts of free trade agreements (FTAs) on the regional auto industry.

In addition, the event also scrutinised policies and regulations on the auto industry, harmonisation of standards, future orientations and technology development trends of the industry.

The auto industry plays an essential role in APEC economies, manufacturing 60 million vehicles per year and directly employing 4 million workers.

According the MoIT, automakers in Vietnam turn out around 500,000 units a year and create 80,000 direct jobs. In 2016, the local industry recorded a growth of 29 percent and contributed nearly 3 percent of the country’s gross domestic product (GDP).-VNA