Experts highlighted the prerequisite for accelerating the growth rate of auto parts and component manufacturers at a seminar on the development of Vietnam’s auto sector.

A seminar on “Industrial development in Vietnam” was co-hosted on 28 December by the Central Institute for Economic Management and the Economic Research Institute of ASEAN and East Asia (ERIA). Particularly, both domestic and international economic experts have offered their thoughts and comments on the topic “Project to grow the automobile sector in Vietnam.”

According to Dr. Yasushi Ueki, an IDE-JETRO representative who spoke at the conference, the yearly consumption of the Vietnamese auto market is anticipated to exceed 1 million automobiles by the early 2030s. Depending on the level of competition between the segment of CBU imported cars and domestically produced cars, the yearly production output could approach 1 million vehicles.

“Therefore, a necessary condition for the development of the automobile industry is to achieve economies of scale in the production of parts and components of the auto industry, in other words, to achieve fast growth of the auto parts/components industry,” he said.

Dr. Yasushi Ueki also provided a number of policy recommendations, including the efficient use of tax mechanisms, technical aid to potential local suppliers, the development of smart cities, and improvements to road infrastructure.

Speaking at the seminar, Mr. Fusanori Iwasaki, a representative of ERIA, emphasized that Thailand, Malaysia, and Indonesia could be used as models for Vietnam’s automobile industry growth policies. The nation’s annual car sales total has just surpassed the mark of more than 400,000 vehicles. Only Thailand and Malaysia in the 1990s and Indonesia in the middle of the 2000s can be compared to this number.

What Vietnam can learn from these three countries is the effective support of the Government and policies to develop the auto industry synchronously. Besides the segment selection, the strategic model comes with attractive incentives for consumers and domestic manufacturers.

According to the representative of ERIA, the process of vehicle electrification is an inevitable trend that cannot be reversed due to the long-term demand for vehicles that are energy-efficient and low in polluting emissions.

However, this process needs a roadmap such as gradually switching to BEV based on the reduction of related costs and setting a target of vehicle sales based on powertrain, specifically HEV+PHEV+BEV will account for 50% of sales by 2035 and increase to 77% by 2040.

In his comments on the subject, Dr. Vo Tri Thanh, an economist, stressed that the auto industry is the main driver of economic growth in Vietnam when it contributes to the improvement of people’s material and spiritual lives, creates favorable conditions for Vietnamese businesses to participate more deeply in regional and global value chains, and supports the growth of small and medium-sized businesses.

In the following stage of development, mastering the digital economy will maintain rapid and sustainable growth, assisting Vietnam in fully upgrading the value chain, including product, process, function, and industrial upgrades, thereby shifting from assembly middlemen to local manufacturers.

Dr. Thanh added: “Developing the auto industry is now not just about creating cars, but creating a smart transportation always requires technological innovation.” Therefore, to meet this, the auto industry must have a vehicle consumption capacity of over 600,000 vehicles/year, become a center for developing spare parts and accessories for regional and global supply, and finally, must also promote technology transfer, especially core technology.

The delegates gave presentations to share and propose orientations on the development of legislation related to industrial development, the orientation of industrial development associated with digital transformation, and other topics outside of the topic of “Project to develop the automobile industry in Vietnam.” Vietnam should prioritize the growth of several important industries, including the automotive and electronic sectors, in the coming years.

Source: Bao Moi

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