VinFast announced a plan to increase the localization rate to 84% after 2 years, experts confirmed the feasibility

Looking at the current localization rate of VinFast cars reaching over 60% and expected to reach 84% by 2026, economic expert Pham Chi Lan said that what VinFast has done in a few years has completely surpassed foreign cars that have been in Vietnam for decades. She believes that VinFast's leadership and the joint efforts of the business community will help create internal strength for Vietnam to rise up in the new era. Big incentives for foreign car manufacturers but localization is still just a dream Speaking at a recent seminar on auto localization held in Hai Phong, economic expert Pham Chi Lan recalled that in the 1990s, when Vietnam started designing an industrialization program for the economy, many investors were interested in the development of Vietnam's auto industry such as Toyota, Isuzu, Hyundai, Deawoo, Ford... And just a short time later, in 1995, there were 11 famous auto manufacturers around the world officially entering Vietnam. "At that time, we all had a belief, an aspiration that people investing in Vietnam would help the supporting industry develop, the localization rate would increase, Vietnamese people would learn about labor skills, management skills, and there would be technology transfer for the formation of the Vietnamese auto industry," she recalled. To realize the above expectations, according to her, Vietnam has also offered great incentives to foreign investors in the automobile sector. Most investors also committed to increasing the localization rate to 30% after about 10-15 years with the promise of technology transfer and vehicle export. The reality after that was completely contrary to the initial commitment and expectations. Most foreign investors in Vietnam used supporting enterprises that they brought from outside to Vietnam. These units enjoyed the same incentives as automobile brands, especially with a corporate income tax rate of only 10% while Vietnamese supporting industry enterprises at that time still had to bear a tax rate of more than 20%. "With such incentives, supporting industries in Vietnam have no opportunity to develop," she said.

VinFast's highly automated production line.

That is also the reason why the number of enterprises in the supporting industry in Vietnam is very small, only about 3,400 enterprises in all industries. The number of units in the automobile industry is even only a very small part of the above number. For her, this is part of the reason why Vietnam's desire to become a modern industrialized country by 2020 has not been achieved. Leading cranes build domestic supply chains With VinFast, Ms. Pham Chi Lan shared her joy in witnessing with her own eyes the important details of electric vehicles such as the body, engine... being produced right in Hai Phong - on the land of Vietnam. In addition, the factory's production lines and equipment are also from the most advanced and modern industrial backgrounds. The economic expert mentioned a number that she found convincing when VinFast had a localization rate of up to more than 60% and according to the plan will reach 84% by 2026. "I completely believe VinFast can do it. In just over 7 years, VinFast has done more than other companies that have been in Vietnam for decades,” she said. Those are numbers that, according to her, have contributed greatly to Vietnam’s industry. “I hope suppliers will join hands with VinFast to realize Vietnam’s dream of localization, to realize the green dream,” she said.

Professor, Dr. Le Anh Tuan - Chairman of the Council of Hanoi University of Science and Technology.

From a technical perspective, Professor, Dr. Le Anh Tuan - Chairman of the Council of Hanoi University of Science and Technology, member of the Global Electric Vehicle Network (GEAN) expressed his joy because in addition to the current production capacity, VinFast also has the orientation to localize many other details in VinFast electric vehicles in the future such as car lights, rims, brake systems, etc. When there is a leading enterprise, the opportunity for enterprises in the supporting industry will have the opportunity to grow stronger. "VinFast is showing its pioneering role, the leading role in not only production but also building a domestic supply chain," the expert assessed. He also reiterated the fact that the number of suppliers in the automotive sector is very modest, only about 300 enterprises with average value content. Meanwhile, compared to Thailand, the number of tier 1 suppliers for the automotive sector alone has reached more than 500 enterprises and up to nearly 1,700 tier 2 enterprises. However, with Thailand, he also pointed out that the proportion of domestic enterprises in Thailand among the above is not high, only about 20%. From there, he expects VinFast's pioneering will not only create an automotive technology ecosystem for Vietnam but also increase the proportion of domestic enterprises participating in the above ecosystem. "With the companionship of VinFast, I believe that we will create an even larger ecosystem for Vietnamese automobiles, thereby opening up the future of the automobile industry and domestic manufacturing industry in Vietnam," the expert believes. Source: https://nhandan.vn/vinfast-cong-bo-ke-hoach-nang-ty-le-noi-dia-hoa-len-84-sau-2-nam-chuyen-gia-khang-dinh-tinh-kha-thi-post850746.html