Mechanical enterprises promote localization, capture market share

According to experts, to maintain market share, mechanical engineering enterprises need to improve their competitiveness and proactively adapt to the supply chain.

Promote localization, increase the proportion of domestic production

Assessing the current development situation of the mechanical industry, economic expert Dinh Trong Thinh said that in recent times, with support from the Government, ministries, branches, and associations, along with the efforts of businesses, the mechanical industry has had positive changes.

Accordingly, currently, Vietnam's mechanical engineering industry has strengths concentrated in three main sub-sectors, including motorbikes and motorbike spare parts; household mechanical engineering and tools; automobiles and automobile spare parts. The domestic mechanical engineering - machinery and equipment industry has gradually mastered and increased the localization rate, creating a driving force to promote the development of other industrial and economic sectors, thereby directly and indirectly creating jobs for millions of workers.

Domestic mechanical engineering has now produced and assembled most types of cars, trucks, and passenger cars; motorbike production has a localization rate of 85-95%, meeting domestic and export demand. Among them, there are some typical enterprises in the automobile sector such as: Vinfast, Thanh Cong, Thaco...

Many products of Intech Mechanical are displayed at the 5th Vietnam International Exhibition on Supporting Industries and Manufacturing (VIMEXPO) 2024. Photo: D.N

However, according to expert Dinh Trong Thinh, it must be acknowledged that, despite many support policies, up to now, the Vietnamese mechanical industry still mainly focuses on the production of components, household goods, tools and spare parts for automobiles. Domestically produced mechanical products currently only account for about 7% of the market.

Meanwhile, many mechanical products require high technology, and domestic enterprises are not yet able to meet production requirements. In addition, diversifying and expanding the market for enterprises in the mechanical industry is still extremely difficult due to fierce competition from foreign enterprises.

Accordingly, expert Dinh Trong Thinh said that to meet domestic demand, the machinery and equipment industry needs to promote localization and increase the proportion of domestic production. This requires domestic enterprises to invest in research, development, and improve production capacity to meet the technical and high quality standards of the market.

"In particular, to maintain a piece of the market share, businesses need to improve their competitiveness. At the same time, businesses need to take advantage of existing free trade agreements to seek new opportunities," said expert Thinh.

Regarding the industry's potential, according to the forecast of the Vietnam Association of Mechanical Industry (VAMI), the domestic machinery market demand could reach 310 billion USD by 2030, but most of it depends on imports. Therefore, VAMI believes that to seize the opportunity, Vietnamese enterprises need to make efforts to develop to meet market demand.

Proactively adapt the supply chain

Identifying adaptation as a key factor in entering the supply chain, many businesses in the mechanical engineering industry have innovated and taken advantage of opportunities for development. Talking to the Industry and Trade Newspaper about the company's market expansion plan in recent times, Mr. Vuong Phuc Ha - representative of Vietnam Industrial Engineering Group Joint Stock Company (Intech Group) - said: To seize development opportunities, the company has constantly innovated to improve product quality to meet market demand. In particular, the strategy of diversifying products and diversifying customer base has brought stable revenue to the company. Currently, 70% of the company's revenue comes from domestic customers, the remaining 30% comes from the export market, of which the Japanese market accounts for a large proportion.

To meet the high quality standards of Japanese customers, Mr. Ha said: The company is focusing on improving the production process from raw material import to processing, assembly and product completion. Accordingly, the company has invested in a product quality control system, with about 90% of products being inspected before delivery to customers.

With market agility, domestic enterprises can completely produce products to supply the global value chain, replacing many imported products. Photo: D.N

"In terms of market expansion, the company representative said that the company is cooperating with partners such as Bitexco and trading companies to expand the domestic and international markets. Along with responding to market fluctuations, technological innovation, towards automation, and emphasizing product quality are given special attention by the company," said Mr. Vuong Phuc Ha.

In addition, in addition to the commitment to promoting energy-saving solutions and sustainable development in the mechanical, automation, technology and green energy industries through the application of advanced solutions in production activities, according to Mr. Ha, in 2025, Intech Group aims to export products and services internationally; international standard working environment; international standard product and service quality, the goal of participating deeply in the global supply chain, bringing Vietnamese brands to the world with high-quality products and professional services.

Also a business that adapts quickly to the market, Mr. Nguyen Hong Phong, Chairman of the Board of Directors of AN MI Tools Company Limited (AN MI TOOLS) - said that, facing the strict requirements from foreign-invested enterprises (FDI) when coming to Vietnam to invest in production and find distributors, Vietnamese mechanical enterprises have to mobilize.

Accordingly, Mr. Phong said, AN MI TOOLS has made efforts to find FDI customers and cooperate with the world's leading enterprises in cutting tools, measuring equipment, machinery, and machine accessories to supply the domestic market. Thanks to that, the company has become the representative of Dormer & Pramet in Vietnam and a strategic partner of 21C Company (Korea).

Following the development trend, AN MI TOOLS has invested in a series of high-tech production machines from the world's leading brands in the production process, improving the competitiveness of the products. The company aims to achieve revenue of 750 billion VND in 2025, 1,000 billion VND in 2026 and 1,500 billion VND in 2027.

With the market's agility, domestic enterprises are fully capable of producing products for the global value chain, replacing many imported products. Sharing about this issue, Mr. Nguyen Van Ket - Director of SKD Vietnam Precision Mechanical Company - said that currently, domestic products can be no less than imported goods in terms of quality and precision. However, according to Mr. Ket, to compete, enterprises need more incentive mechanisms; in which priority is given to using domestic goods for domestic economic and investment projects.

“To revive the domestic mechanical industry, the first thing is to have a market. But to have a market, the Government and ministries and sectors need to have their own mechanisms for the industry. For example, prioritizing domestic goods by limiting imports of products that can be produced and produced well and can be used for projects," Mr. Ket emphasized.

Source: https://congthuong.vn/doanh-nghiep-co-khi-day-manh-noi-dia-hoa-chiem-linh-thi-phan-360632.html