Low level of car production holds back Vietnamese auto part suppliers

Some 50,000 vehicles per year is the minimum production level needed for the growth of the Vietnamese auto part industry. Unfortunately, few car producers in Vietnam have reached such a level.
Low level of car production holds back Vietnamese auto part suppliers ảnh 1Auto parts manufactured at a Vietnam Motors and Agricultural Machinery Corporation factory. (Photo: baotintuc.vn)
Hanoi (VNS/VNA) – Some 50,000 vehicles per year is the minimumproduction level needed for the growth of the Vietnamese auto part industry.Unfortunately, few car producers in Vietnam have reached such a level.

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

Meanwhile, Kia fell short of the threshold with just 35,181 vehicles. VinFastfollowed with 34,746 and Mitsubishi with 26,346.

Truong Thi Chi Binh, an expert at Vietnam Institute of Strategy and Policy forIndustry and Trade, underlined the low level of car production as a setback forthe Vietnamese auto part industry.

She said low production meant low demand for domestic auto parts, discouragingsuppliers from investing in new production lines.

Without new production lines, the suppliers become less competitive in price asthey cannot achieve economies of scale.

Consequently, car producers have to find their auto parts elsewhere.

“Since auto production is insufficient to encourage domestic auto partsproduction, many car producers have no choice but to import their inputs,” Binhsaid.

The expert believes that Vietnam should introduce favourable policies to boostthe growth of the domestic industry.

Otherwise, Vietnamese suppliers will be priced out of the market by foreigncompetitors.

The general director of a Japanese auto producer shared the view. He pointedout that car parts prices in Vietnam are two to three times higher than thosein other regional countries.

Auto producers in Thailand purchase just 10 percent of car parts from abroad.They get the rest from around 3,000 Thai suppliers.

Meanwhile, auto producers in Vietnam have to import 80-85 percent of car parts,effectively reducing the number of Vietnamese suppliers to around 300.

The general director called for more favourable policies to encourage domesticproduction of auto parts, particularly medium-sized steel and plastic parts.

Two experts at the Faculty of Economics, Vinh University, revealed that onaverage, an auto producer buys car parts from two domestic suppliers.

With over 90 percent of suppliers in Vietnam being FDI firms, Vietnamese firmstake up a minority.

According to the Vietnam Register, 318,704 cars were sold and registered in Vietnamin 2021, higher than the figures in 2020 (296,634) but lower than in 2019(322,322)./.
VNA

See more

At an automotive exhibition in Shanghai, China. (Photo: AFP/VNA)

Chinese electric vehicles drive back into Vietnamese market

About a decade ago, Chinese car brands like Zotye Z8, Beijing X7, and Brilliance V7 entered the Vietnamese market to limited success. But a new fleet of modern Chinese vehicles began to gain traction in the Vietnam market last year.

Illustrative image (Photo: VNA)

Nearly 16 trillion VND raised through January bond auctions

The January auctions saw a strong preference for 10-year and 15-year bonds, representing 80.2% and 14.8% of the total, respectively. Specifically, 10-year bonds raised 12.81 trillion VND, while 15-year bonds garnered 2.36 trillion VND.

Thang Long ferry at Cau Da port in Ba Ria - Vung Tau province. (Photo: VNA)

Vung Tau - Con Dao high-speed ferry reoperated

The high-speed ferry service connecting Vung Tau city and Con Dao island in the southern province of Ba Ria-Vung Tau and vice versa was resumed on February 7 by Phu Quoc Express JSC after a 5-month suspension.

At the working session between the Vietnam Directorate of Market Surveillance and the US Embassy over counterfeit Sunview-branded raisins in Hanoi on February 7. (Photo: dms.gov.vn)

Vietnam, US tackle counterfeit Sunview-branded raisins

Statistics showed that since 2024, there have been 27 documented cases involving Sunview raisins, resulting in fines of over 536 million VND (21,440 USD), primarily due to the sale of smuggled goods and products of unclear origin.

The VF3 model manufactured by VinFast is the most popular model in Vietnam's market. ( Photo courtesy of the company)

EVs will no longer be exempt from registration fees

Instead of enjoying a zero percent registration fee, battery-powered electric vehicles (EVs) will be required to pay 50% of the fee applicable to internal combustion engine cars with the same seating capacity.

Thuan An Fishing Port (Photo: tuoitrethudo.vn)

Thuan An fishing port opens, boosting Hue’s seafood industry

The second docking area of Thuan An Fishing Port has a minimum cargo handling capacity of 20,000 tonnes per year, and is capable of simultaneously accommodating 500 fishing vessels of at least six metres in length for docking and storm shelter.

Vietnamese prefer buying gold to mark God of Wealth Day (Photo: VNA)

Gold prices up again on God of Wealth Day

Gold prices surged significantly, exceeding the threshold of 90 million VND (3,550 USD) per tael at the opening session of the God of Wealth Day on February 7 (the 10th day of the first lunar month).