Historic "comebacks"
Until now, when the world market has the latest technology car products, Vietnamese users can only access them through complete imports. But the situation has changed, domestic production and assembly units have created "reversal moves" when exporting advanced products to the US, Europe and Southeast Asia.
 |
| For the first time, Vietnam has a car company founded by Vietnamese people exporting to the US. Photo: VinFast |
At the end of 2022, the event of electric cars produced by Vietnamese people leaving Vietnamese ports marked a new step forward for the domestic automobile industry. This is the first batch of VinFast VF8 cars exported, with a quantity of 999 units, destined for the US market. In fact, the US is the most "difficult" automobile market in the world with a series of certification requirements for quality and safety. This shows that products produced by Vietnamese people have met global standards.
After that, VinFast products were also exported to many other regions in the world, including Europe and Southeast Asia. Just two years after the above models spread out of Vietnam, VinFast ranked 28th in the ranking of the world's largest electric car manufacturers with published data of 44,260 cars, above many major brands such as Honda and Subaru.
Not only pure Vietnamese brands, foreign automakers are also tending to make Vietnam their key “factory”. Typically, at the end of October 2024, the Hyundai Palisade SUV model was exported by the Hyundai Thanh Cong joint venture to Thailand – the largest export market in the region. This activity is part of Hyundai Thanh Cong’s plan to export more than 4,000 vehicles to countries in the region in the period 2024 – 2025.
 |
| Exporting a batch of Hyundai Palisade cars to Thailand. Photo: Hyundai |
In particular, the localization rate (RVC) of Palisade is over 40%, which means that this model is eligible for the 0% import tax incentive under the ATIGA Agreement in the ASEAN region. Therefore, the Vietnamese auto support industry has ensured the supply of components, helping car manufacturers ensure the localization index to proactively compete on selling prices when exporting.
Many companies consider domestic automobile production and assembly as their strength.
For the domestic market, many car manufacturers also consider domestically produced and assembled products as their strength. Specifically, the luxury car manufacturer Mercedes-Benz Vietnam has had a breakthrough in sales thanks to products assembled at the factory in Ho Chi Minh City since 1995. Currently, the German luxury car manufacturer's product lines manufactured in Vietnam include the C-Class, E-Class, and GLC 200.
Along with that, the Mercedes-Benz factory has just had its operating period extended for another 5 years. Although this is not a very long time, it has helped the car company avoid interruptions in the production line and find new solutions when it has new leadership.
 |
| German engineers guide the process of assembling the chassis into the car body at the MBV factory. Photo: MBV. |
In addition, the automobile industry in Vietnam also shows diversity when manufacturers entering the market for the first time have aimed at domestic production. Typically, the joint venture between the US and China GM – (SAIC – WULING) provides components, authorizing TMT Motors to exclusively manufacture, assemble and distribute Wuling brand electric cars in Vietnam. So far, TMT Motor’s factory in Hung Yen province has 2 latest models, including Wuling Mini EV and Wuling Bingo.
At the event announcing the price of the Omoda C5 model on November 26, Mr. Vu Van Tien - Chairman of the Board of Directors and General Director of Geleximco Group - affirmed that Vietnam will become the "capital" of Chery car production (from China) in the region with a capacity of up to 200,000 cars/year. Cars produced at the factory in Thai Binh will not only supply the domestic market but also aim for export. Geleximco's joint venture will also establish a design and manufacturing center in Thai Binh to transfer technology from Chery.
 |
| The Omoda C5 model is oriented towards localization. Photo: Tran Dinh |
In fact, domestically assembled and manufactured cars will be trusted and used by consumers because of the availability of spare parts for repairs and reasonable prices. Especially during the period when the Government reduced 50% of registration fees for domestically produced and assembled cars, the market recorded a clear positive signal.
According to a report from the Vietnam Automobile Manufacturers Association (VAMA), the number of cars sold in Vietnam in October set a new record with sales reaching the highest level since the beginning of the year with 38,761 vehicles.
The above signals show that the Vietnamese automobile industry has improved and developed a lot through product quality, support policies and "taking shortcuts and anticipating" consumer trends.
The export target of 90,000 cars and a value of 10 billion USD becomes feasible
The automobile industry is an important economic sector in the process of industrialization and modernization in Vietnam. In recent years, the automobile industry has always been given priority for development and has made great contributions to the country's socio-economic development.
 |
| Sales of domestically produced and assembled cars have seen strong growth. Photo: Can Dung |
According to the Draft Strategy for the Development of Vietnam's Automobile Industry to 2030, Vision to 2045, with a target of 2035 issued by the Ministry of Industry and Trade, the total vehicle output will reach about 1,531,400 units, of which 9-seat vehicles will be about 852,600 units, 10-seat vehicles or more will be about 84,400 units, trucks will be about 587,900 units, and specialized vehicles will be about 6,500 units. The proportion of domestically assembled vehicles accounts for about 78% of domestic demand. By 2035, the total number of exported vehicles will reach about 90,000 units...
With the current signals, Associate Professor Dr. Nguyen Thuong Lang - senior lecturer (Institute of International Trade and Economics, National Economics University) - said that the Vietnamese automobile industry is gradually asserting its position on the world map. It can be seen when comparing the present with more than 20 years ago, when our country initiated the automobile localization program. Despite many difficulties, after many years of perseverance by the Department of Industry (Ministry of Industry and Trade), along with the right policy orientation, Vietnam has made significant progress. Contributing to this success is the emergence of a new generation of entrepreneurs, who are both dedicated and visionary, and have strong financial resources.
“ Success also lies in changing thinking and working methods. Previously, the requirement for localizing products focused on producing some basic components such as batteries or tires. However, that was not feasible because the quality of components did not meet international standards. But today, the situation has changed. Brands such as must compete on selling price. This creates a great motivation for international and domestic investors to participate in the Vietnamese automobile industry, even though they were initially hesitant about the development potential ” – Associate Professor, Dr. Nguyen Thuong Lang said.
Associate Professor Dr. Nguyen Thuong Lang commented that the direction of the Vietnamese automobile industry is closely linked to the global trend, focusing on environmental protection with low-emission vehicles or electric vehicles (EV). Along with that, the increase in income and living standards of the people also contributes to creating positive signals.
“ If we continue to develop technology in automobiles, Vietnam's prospects will certainly be even brighter ,” Associate Professor, Dr. Nguyen Thuong Lang shared.
 |
| The auto industry is moving towards integrating into the global supply chain. Photo: Can Dung |
Along with that, for the automobile industry to develop sustainably, the Associate Professor, Dr. stated that it is necessary to converge factors including a stable market and attractive enough profits for investors. Next are incentive policies such as reducing registration tax, land support, tax incentives in the early stages, upgrading road quality, or environmental protection and emission standards all play a very important role. These are external factors that help the industry develop.
In particular, businesses participating in the automotive industry need perseverance, passion and a willingness to take risks to invest in new trends such as artificial intelligence (AI) and green technology. This not only helps reduce costs but also brings the Vietnamese automotive industry in line with the transformation of the global market.
The Ministry of Industry and Trade released the Draft on "Vietnam's automobile industry development strategy to 2030, vision to 2045" on September 17 to collect public comments. The main content of the strategy is to promote the internal strength of all economic sectors in the country; focus on linking and cooperating with large automobile manufacturing corporations in the world to develop the automobile industry in sync with the development of traffic infrastructure. Regarding supporting industries, we will approach and apply technology to manufacture important parts and components such as transmissions, gearboxes, engines, car bodies, etc. for several vehicle models; strengthen cooperation with major automobile manufacturers, select types of spare parts and components that Vietnam can produce to take on the role of a link in the global production and supply chain. On that basis, invest in advanced technology and produce for export. |
Comment (0)