Vietnam boosts foreign investment attraction in country’s auto industry

HANOI, Sep 3 (Bernama): Vietnam will strive to attract big business and high-tech companies, said Nguyen Anh Tuan, deputy director of the Foreign Investment Agency of the Ministry of Planning and Development. Investment.

At the same time, the country will prioritize high-tech investment projects, industry support and innovation in the digital economy, especially in the automotive industry, and create conditions favorable for Vietnamese companies to participate in the value chain, according to the Vietnam News Agency (VNA).

Nguyen Thi Thu Ha, managing director of Invest Global, said that with a population of nearly 100 million and favorable natural and geographical conditions, Vietnam has great potential in the automotive industry.

She added that it is also an industry that the Vietnamese government has prioritized for development, hoping to build a strong Vietnamese auto industry and make an important contribution to the economy.

However, compared to other countries in the region, the number of Vietnamese suppliers in the automotive industry was still very low and only a few domestic suppliers could participate in the supply chain of automotive manufacturers and assemblers in Vietnam.

Dang Hoang Mai, a representative of the Vietnam Strategy and Policy Institute for Industry and Commerce, said Vietnam has the potential to develop the electric vehicle (EV) market in the future, as the rate current car ownership in Vietnam was 23 cars per 1,000 people. This figure was only equal to 10% of Thailand and 5% of Malaysia.

With increasing income levels and improving infrastructure, sales and production of the automotive industry are expected to increase in 2021-2030.

However, contrary to the upward trend in car consumption, companies operating in the auto industry, especially the auto manufacturing support industry, did not experience the expected growth, Mai said.

The localization rate for personal cars with up to nine seats is low at less than 20%, of which Thaco reaches 15 to 18%. Toyota Vietnam is the highest with 37% (for Innova models).

This number is much lower than in Thailand, Indonesia and Malaysia.

Vietnamese auto companies expected to have more partners and component makers assembled in the country, Tuan said.

According to VNA, as the sixth largest economy in the world, India’s total investment capital in Vietnam is only 0.2% of the total FDI in which 139 countries and territories have invested.

The deputy director noted that the opportunity to promote cooperation and investment between the two sides is huge, especially with Vietnam boosting FDI inflows in the automotive support industry.

At a recent Vietnam-India auto sector business meeting, he said the investment cooperation between the two countries still does not live up to the potential.

Pranay Verma, India’s Ambassador to Vietnam, noted that the Indian Automotive Components Manufacturers Association (ACMA) has been keen to explore investment, trade and business opportunities in Vietnam.

He said the ACMA, which has over 800 members, contributes 85% of the sales of the Indian auto parts industry. – Bernama

Keith P. Plain