Vietnamese automobile exports abroad: the start of a great dream15/01/2023
Despite being in its infancy and still fairly tiny, Vietnam’s export of automobiles is crucial for the growth of the manufacturing sector, which forms the backbone of a modernized industrial nation.
Vietnamese cars exported abroad
End of November 2022 saw the departure from Dinh Vu port (Hai Phong) of VinFast Company’s ship carrying 999 electric vehicles with Vietnamese branding towards the US. Since the US market has the highest technological obstacles in the entire world, this is the first time a domestic brand automobile firm has shipped vehicles there. If all goes according to plan, the number of cars sold out at the lowest selling price of more than 40,000 USD, and the total will be at least over 40 million USD.
In the past, Truong Hai Group Joint Stock Company (Thaco) claimed that this “big man” had begun exporting semi-trailers to the US and 500 passenger cars to ASEAN nations at the beginning of 2022. These are auto components, and overall export revenue is anticipated to increase four times from 2021 to reach 190 million USD this year.
The processing and manufacturing industry is the key to creating a country’s prosperity. (Photo by Hoang Ha)
Last month, Thanh Cong Group (TC Group) officially opened the No. 2 vehicle factory in Ninh Binh province’s Gian Khau industrial zone. This is a state-of-the-art factory with intelligent production lines that were imported from Korea using the most recent technologies. The factory’s total planned capacity is 100,000 vehicles per year. When paired with factory No. 1, which will have a total planned capacity of 180,000 vehicles per year, it will be able to meet domestic demand and export cars.
Although Vietnam’s automobile exports are still in their infancy and are still quite small, this has important implications for the development of the manufacturing industry. Opening export markets, especially to areas with a developed and highly competitive production base, will affirm the capacity of enterprises and help increase output.
Expert Nguyen Minh Dong claims that examining the growth of the vehicle sector globally demonstrates that no company only spends in its market. Exporting automobiles is necessary to broaden domestic markets, boost production, control prices, and boost competitiveness. The capability of the domestic processing and manufacturing industry is supported by increasing exports. Facts demonstrate that a nation’s ability to prosper depends on its processing and manufacturing sectors.
Do great dreams come true?
President Nguyen Xuan Phuc stressed in his speech at the 25th anniversary of Thaco’s founding last weekend that the development from a used vehicle trading company to a multi-industry group like Thaco, where cars are the mainstay, is evidence that Vietnam can fully build huge enterprises. Thaco constructs the exterior of the Vietnamese-owned auto sector more so than it does actual automobiles. The strong will to succeed and the vision are the primary causes of success.
Following Chu Lai, Hai Phong, Ninh Binh, … are also becoming major automobile production centers, not only meeting domestic demand but also exporting.
The automobile industry’s rapid growth will act as a catalyst for the nation’s industrialization and modernization. (Photo: CTV)
The automotive industry is a customer of many related manufacturing industries, such as metals, mechanics, electronics, chemicals, etc. The intense development of the automobile industry is considered a positive factor, promoting the development of related industries, and creating a driving force for the industrialization and modernization of the country.
Numerous free-trade accords have Vietnam as a member. Automobile exports with 0% tariff preferences to ASEAN nations and, soon, to the European Union (EU) and North America, represent excellent business opportunities. However, to benefit from tariff favors, the internal localization rate must be met as promised. Investment is therefore essential to achieving a high localization rate and reaping the rewards of exporting.
Businesses claim that because the majority of components are still imported, domestic automotive production has not yet reached the price competitiveness factor. Only a small number of components are made domestically, but the volume is insufficient to support competitive pricing. Car manufacturing and assembly in the nation are around 20% more expensive than in other nations in the region. To increase the likelihood of exporting automobiles, this gap must be closed. Despite the automobile industry’s best efforts, there remains a significant risk if the State does not adopt laws that are helpful.
The chairman of Thaco’s board of directors, Mr. Tran Ba Duong, claims that the global automobile industry has always developed by moving from component production to assembly and raising the localization rate. The auto sector will undoubtedly grow if there are fair preferential policies in place, and domestically produced and built cars will export more and more.
Source: Vietnam Net
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