Mechanical auxiliary industry: Fertile land has not been fully exploited
The mechanical auxiliary industry in Vietnam has a great potential for development, with key fields such as manufacturing motorcycle components, household mechanics, and automobiles and spare parts. These are industries with high potential, especially in the context of participating in many international trade agreements, opening up great opportunities for Vietnam’s mechanical enterprises and supporting industries.
1. Large room of mechanical auxiliary industry
According to the Department of Industry under the Ministry of Industry and Trade, Vietnam’s mechanical engineering industry currently has three main dominant sectors: motorcycle manufacturing and components, household mechanics and tools, and automobiles and auto parts. These are potential areas for the development of supporting industries.
The domestic mechanical engineering industry has achieved the ability to produce and assemble a variety of cars, trucks and passenger cars. The localization rate in motorcycle production is currently 85-95%, meeting not only domestic demand but also exporting to the world. Some prominent enterprises in the automotive sector include Vinfast, Thanh Cong, Thaco…
Vietnam’s participation in many free trade agreements is opening up great opportunities for mechanical enterprises and supporting industries. These agreements will help export businesses more conveniently, expand markets and attract foreign investment.
The Department of Industry said that currently, domestically produced metal components have met 85-90% of the demand for motorcycle production, about 15-40% of the demand for components for automobile production (depending on the type of vehicle), about 20% for the production of synchronous equipment, 40-60% for agricultural machines and power machines, etc and 40% for construction machines. For high-tech industries, domestic metal components only meet about 10% of the demand.
In particular, the metal component manufacturing industry for the motorcycle industry is growing strongly with high supply capacity. Thanks to the large market, FDI assembly enterprises in Vietnam have called on many FDI suppliers to invest and build cooperative relationships with domestic suppliers. Similarly, the metal component manufacturing industry for agricultural machinery, power machinery and construction machinery is also thriving with a high localization rate.
Ms. Truong Thi Chi Binh, General Secretary of the Vietnam Association of Supporting Industries (VASI), said that mechanical enterprises and supporting industries are facing great opportunities thanks to their participation in free trade agreements. These agreements will bring advantages when exporting, expanding markets and attracting foreign investment.
2. Proposing long-term plans for the mechanical auxiliary industry
In order to develop the mechanical industry and especially the mechanical supporting industry, the Vietnam Association of Mechanical Enterprises (VAMI) realizes that many enterprises have made significant achievements in fields such as mold manufacturing, mechanical components, electrical cables, etc and technical rubber plastic components. However, the capacity and quality of domestic supporting industry products are still limited compared to international competitors, leading to difficulties in price competition.
With a long-term vision, VAMI proposes a number of specific solutions such as encouraging medium-sized enterprises to invest in expanding production and improving product quality. This includes supporting human resource training, providing financial assistance, and helping businesses access new technology. At the same time, it is necessary to establish output support programs to connect with potential purchasing partners, especially in public investment projects and global supply chains.
In addition, the vigorous development of the downstream industry, focusing on industries such as energy and precision mechanics, is also one of the important strategies to attract investment from multinational corporations and help the industry support sustainable development. This will not only maintain but also expand the market for domestic supporting industry products, thereby helping Vietnamese mechanical enterprises actively participate in the international supply chain and provide final products to assembly and manufacturing enterprises.
3. Conclusion
In general, promoting the development of mechanical auxiliary industries not only helps to improve national competitiveness but also creates momentum for businesses to participate in the global supply chain. With appropriate efforts and strategies, the mechanical auxiliary industry promises to continue to make positive contributions to the overall economic development of the country, and at the same time promote exports and attract investment from international markets.
In order to maximize the potential of the mechanical auxiliary industry and promote international integration, Vietnam Manufacturing Expo 2024 – an exhibition event organized by RX Tradex Vietnam , will be an ideal platform for mechanical and supporting industry enterprises to showcase their capabilities and connect with domestic and foreign partners. Through this event, businesses will have the opportunity to promote trade, share technology and learn from developed countries. Register right here.
