The Vietnamese automobile industry is expected to grow well, driven mainly by an increase in per capita income, demand for cars, and infrastructure improvement.

Speaking at a seminar on auto industry, held during the Automechanika HCM City expo, Nguyen Thanh Dam, chairman of Vast Group JSC, said that production reached 215,000 autos last year, which was modest compared to other countries in the region.

This accounted for just 0.2 per cent of the number of vehicles produced globally.

More than 352,200 units were bought in Viet Nam last year, ranking fourth in the ASEAN region after Indonesia (1.1 million units), Thailand (950,000 units), and Malaysia (560,000).

The average number of cars per 1,000 people in Viet Nam was still low (at 23 cars per 1,000 people) compared to other countries, Dam said.

With an increase in income, a “golden demographic” with the number of people having good earnings now accounting for 52 per cent of the population, demand for cars among young families and car consumption is expected to increase strongly.

“There will be fierce competition among large automobile companies this year,” he said, adding that carmakers would launch many new models to expand their market share.

The automobile market is expected to grow by 10 per cent this year, he said.

But the underdevelopment of the supporting industry, the low localisation ratio and tax policies that result in high car prices have affected the development of the automobile industry.

To make a car, between 30,000 and 40,000 accessories and parts are needed, but in Viet Nam more than 90 per cent of these accessories and parts are supplied by parent companies or other foreign companies, they said.

According to the Ministry of Industry and Trade, Viet Nam has 358 businesses involved in automobile production, including 50 automobile assemblers and 214 accessories makers.

Local companies have produced simple accessories, such as a body shell, cabin shell, gear boxes, car seat, and brakes, with low technology content and value addition.

Acknowledging the situation, the Government has devised policies to boost the development of the local supporting industry to increase localisation rates as well as enable more local enterprises to participate in the automobile production chain, delegates said.

In addition, trade fairs will offer opportunities for local firms to learn about the latest accessories and parts as well as new car models, and explore co-operation opportunities with foreign partners, they added.

Automechanika

Automechanika HCM Expo, a regional trade fair for the automotive service industry, opened on February 28 at the Saigon Exhibition and Convention Centre, with 359 international exhibitors from 18 countries and territories taking part.

Fiona Chiew, deputy general manager of Messe Frankfurt (Hong Kong) Ltd, said: “With encouraging feedback from last year’s edition, the fair will continue to address the local market’s inherent needs by offering a strong collection of domestic and overseas exhibitors, who are presenting their latest products and services.

“This year, the show will spotlight market segments such as the aftermarket and the commercial vehicle sector as a result of their growth potential in Viet Nam’s automotive industry.”

The fair provides important opportunities for local businesses to network, exchange business ideas and broker deals with some of the industry’s most influential names.

It also helps companies shape their business strategies and investment decisions when penetrating Viet Nam’s automotive industry, and supports local firms entering overseas markets.

Over 55 per cent of exhibitors are displaying the “Truck Competence” pictogram at their booths, which will help buyers quickly identify the specific products, services and technology that they need.

Visitors will also find a wide range of products including parts, components, electronics, lightings, lubricants and removers, as well as wheels and tyres for commercial vehicles from both local and overseas exhibitors.

The expo also includes many other events, including fleet management conference, collision repair training and maintenance workshop, drift performance, and one-to-one matchmaking programme.

Organised by Messe Frankfurt New Era Business Media Ltd, Chan Chao International Co Ltd and Yorkers Exhibition Service Vietnam, the expo will run until March 2. — VNS