MTA Vietnam is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC’s registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726

What should Vietnam’s engineering industry do to meet 300$ billion market’s demand?

31/03/2022

According to preliminary forecasts, Vietnam’s total mechanical market demand from now to 2030 may reach more than 300 billion USD.At present, Vietnam’s mechanical engineering industry only meets about a third of the domestic mechanical product demand.

Strengths concentrated in 3 sub-sectors

According to the Department of Industry (Ministry of Industry and Trade), with about 25,000 active mechanical enterprises, accounting for nearly 30% of the total number of processing and manufacturing enterprises in Vietnam, the domestic mechanical industry has gradually mastered and improved the localization rate; creating a driving force for other industries and economies to develop, thereby, directly and indirectly, creating jobs for millions of workers.

The mechanical industry acts as a “backbone” industry, is the foundation and the driving force for other industries to develop

Speaking at the online economic-financial forum: “Improving mechanisms and policies to promote the development of Vietnam’s mechanical engineering” recently, Assoc. Dr Le Thu Quy – Director of the Training Center – Institute of Mechanical Research (Ministry of Industry and Trade) said: Currently, Vietnam’s mechanical engineering industry has strengths in three sub-sectors including motorcycles and motorcycle parts; household mechanics and tools; cars and car parts. These three sub-sectors account for nearly 70% of the total industrial production value of mechanical engineering in the country.

Notably, the mechanics of domestic production have also produced and assembled most types of cars, trucks and passenger cars; The production of motorcycles has had a domestication rate of 85-95%, meeting the domestic and export demand. In particular, some typical enterprises in the automotive sector such as Vinfast, Thanh Cong, Thaco…

Election of Truong Hai Automobile Joint Stock Company (Thaco) with flexible adaptation, development of appropriate development strategy, many parts and mechanical export items of Thaco Auto (under Thaco) increase in quantity and value. For the domestic market, Thaco Auto has developed suitable products, boosting the supply chain of spare parts and mechanics for many automakers, motorcycles and FDI enterprises, such as Hyundai, Toyota, Isuzu, Piaggio, Amann, Makitech…

Looking at mechanical engineering, economic expert Dr Dinh Anh affirmed that, when it comes to mechanical engineering in general, including the automobile industry, currently only 20 countries develop the automobile industry as an independent industry. Vietnam, despite being a backward country, is in the process of development and the pillar is the automobile industry that directs the industry into the map of the world automobile industry.

However, Dr Dinh Anh pointed out that Vietnam mechanical products in addition to brands such as Vinfast, Thanh Cong, Thaco, the rest of the popular domestic mechanical enterprises are small scale, low competitiveness, not mastered the complete core technology in the field of mechanics. Besides, the product quality is not good, the cost is high and there are almost no key industrial products in the mechanical industry that can compete with imported products.

The Vietnam Mechanical Enterprise Association (VAMI) also believes that, over the years, the limited and weak range of mechanisms and management policies as well as the enterprises themselves have caused the mechanical industry to develop quite dimly, not meeting the requirements. Even in the domestic market, the mechanical engineering industry does not have much market share, must mobilize and develop without receiving effective support from the State’s policy system to have more orders from public investment like other countries. Leading to mechanical enterprises that lacked orders and also suffered losses right at home. There are many large projects on construction, transportation, irrigation works, oil and gas, marine economy, shipbuilding, cars, motorcycles… still mainly using imported mechanical products or by FDI enterprises.

Identifying the right market needs

The Prime Minister has approved the Vietnam Mechanical Industry Development Strategy to 2025 with a vision to 2035. The overall objective of this Strategy is that by 2035, Vietnam Mechanical Industry will be developed with the majority of specialized industries with advanced technology, product quality meeting international standards, further participating in the global value chain, using energy economically, efficiently and competitively in international integration; Professional, disciplined and highly productive workforce who are proactive in the research, design and manufacture of mechanical products, basically meeting the mechanical product needs of the domestic market.

According to Assoc. Prof. Dr. Le Thu Quy, to develop Vietnam’s mechanical engineering industry, it is necessary to identify market needs, specify gaps to develop areas where the industry can compete. In addition to creating markets for enterprises, mechanisms and policies must be flexible to encourage enterprises to invest, expand production, and increase localization rates. Particular emphasis must be placed on the development of mechanical metallurgy, supporting industries, etc.

Economic expert Dr Dinh Anh also commented that in order to achieve this goal, it is necessary to have policies, specifically to increase the internalization rate of the mechanical industry and increase the value of domestic production. As for the automotive industry, Vietnam should aim at higher value-added chains.

On the business side, Thaco Auto representative said that in order to develop products to promote the development of the mechanical engineering sector of the enterprise, the company has proactively promoted the modern technology platform and the package value chain from research, product development to production and supply is an important basis for the company to improve product quality, reduce cost, create competitive advantage.

Currently, Vietnam signs many trade agreements and multinational companies expand their search for joint venture partners, associates, manufacturing plants in Vietnam and supply chain shifting trends are big opportunities for many enterprises.

Capturing this trend, Thaco Auto has associated with FDI enterprises to supply OEM components; connect with Vietnamese trade and service participants abroad; and study the trend of cooperation between the major economies of the United States, China, Australia, Japan, Canada and the EU to develop business; explore the policies and tax incentives among countries to access potential markets.

Referring to the development solution of Vietnam’s mechanical engineering industry, Mr Dao Phan Long – Chairman of VAMI said that Vietnam’s mechanical engineering wants to have many orders, participate in the export chain, need to renovate equipment, technology, scientific and technological qualifications to be able to manufacture products, spare parts, components, machine details according to the orders of foreign partners with diverse types. In the future, the mechanical engineering industry requires the development of raw materials, molds, fabrication processing, not just simple cutting, so businesses are forced to link up and delve into the global value chain.

Information from VAMI indicates that the opportunities for the mechanical engineering industry in the coming time are many. First of all, the market for Vietnam’s machinery and equipment is huge, reaching more than $300 billion by 2030. In particular, the value of machinery and equipment for industrial works such as thermal power, hydropower, chemicals, mining and mineral processing is about 120 billion USD; equipment and supplies for the construction of the high-speed rail system is about 20 billion USD; the subway system is about 10 billion USD; the automobile industry is about 130 billion USD… Accordingly, the opportunities in Vietnam’s mechanical engineering industry are huge.

On the part of the Ministry of Industry and Trade, in order to support mechanical engineering enterprises, in 2022 and the coming years, the Ministry continues to strengthen and improve the performance of 2 technical centers supporting the development of industry in the North and the South. Currently, these two centers have activities to support mechanical industry enterprises in some localities across the country such as supporting the training of production management systems, business management systems; improving capacity to meet international standards. The Centers are actively cooperating with multinational corporations in Vietnam such as Toyota, Mitsubishi, Canon to find suitable suppliers to participate in their value chains.

In addition, the Ministry of Industry and Trade will continue to develop the downstream industry; including some industries such as energy industry, precision mechanical industries as well as some mechanical engineering industries to ensure that the supporting industry has development conditions…

Source: Bao Cong Thuong

Share this post

You may be interested in

21/06/2022
Conference “3D Metal Printing: From Potential To Application Reality For Professional Manufacturing In Vietnam”
This special topic of 3D Metal Printing gathers experts and engineers from domestic and abroad to...
20/06/2022
Talkshow “World Class Manufacturing: How To Get There From Here”
World Class Manufacturing (WCM) is a structured and integrated manufacturing system that covers...
20/06/2022
Conference “Accelerating Vietnam’s Manufacturing Transformation Towards Smart Production”
Not apart from the picture of digital transformation around the world, Vietnam manufacturers are...
20/06/2022
Talkshow “How To Improve Business Collaboration And Funding Capacity For Manufacturing Firm”
Besides the enterprise’s capital, mobilized capital (borrowing or issuing additional shares)...
23/05/2022
Seminar “How To Reduce 8+1 Wastes In Manufacturing Operations”
With aims to support the local enterprises in manufacturing management and operation in the “new...
06/05/2022
Promoting energy saving in Vietnamese industries
On May 5 and 6, 2022, in Hanoi, the Ministry of Industry and Trade will coordinate with the World...
06/05/2022
Businesses worry about cutting off the supply of raw materials
The wave of re-epidemic outbreaks in China caused certain difficulties in the electronics...
06/05/2022
Steel sheet group’s profit was stable in the first quarter of 2022, except for one large company that declined
Although a lot is expected from a stable production system as well as domestic and...
06/05/2022
Domestic mechanical engineering enterprises: Is it possible to seize the golden opportunity?
In the wind power segment alone, by 2045 with an expected capacity of 40,000 MW and can be...
06/05/2022
COVID-19 is under control, industrial production increases by 9.4% over the same period
After the COVID-19 epidemic was under control, businesses were more proactive in terms of labor...

Subscribe to Our eNewsletters

    captcha
    BOOK A STAND
    ONLINE REGISTRATION
    Facebook stream
    Comments Box SVG iconsUsed for the like, share, comment, and reaction icons
    3 months ago
    MTA VIETNAM

    Tham Gia Giờ Trái Đất Cùng MTA Vietnam Để Chung Tay Kiến Tạo Tương Lai
    [English below]
    Là một phong trào môi trường có quy mô lớn nhất thế giới, Giờ Trái Đất đã tạo nguồn cảm hứng và thúc đẩy các cá nhân, cộng đồng, doanh nghiệp và tổ chức trên 190 quốc gia và vùng lãnh thổ hành động vì biến đổi khí hậu và mất môi trường tự nhiên. Đây cũng là sự kiện thuộc chuỗi phát triển bền vững từ Informa Markets với mong muốn tương tự. Hãy cùng MTA Vietnam tắt đèn từ 20:30-21:30 tối nay, thứ Bảy ngày 26/03/2022 và lắng nghe thông điệp hành động từ WWF toàn cầu trong Giờ Trái Đất 2022 nhé!
    ---------------------//
    Join Earth Hour with MTA Vietnam To Shape Our Future

    As the world's largest environmental movement, Earth Hour has inspired and motivated individuals, communities, businesses and organizations in 190 countries and territories to take action for climate change and loss of natural environment. This is also an event in the sustainable development chain from Informa Markets with the same desire. Let's turn off the lights with MTA Vietnam from 20:30-21:30 tonight, Saturday, 26/03/2022 and listen to the message from WWF during Earth Hour 2022!

    #earthhour #MTAVietnam #MTAHanoi #Manufacturing #Engineeering #MTAVietnamserries #MTAVietnamGoesHybrid #ManufacturingIndustry #MTAVietnam2022
    ...

    Tham Gia Giờ Trái Đất Cùng MTA Vietnam Để Chung Tay Kiến Tạo Tương Lai
[English below]
Là một phong trào môi trường có quy mô lớn nhất thế giới, Giờ Trái Đất đã tạo nguồn cảm hứng và thúc đẩy các cá nhân, cộng đồng, doanh nghiệp và tổ chức trên 190 quốc gia và vùng lãnh thổ hành động vì biến đổi khí hậu và mất môi trường tự nhiên. Đây cũng là sự kiện thuộc chuỗi phát triển bền vững từ Informa Markets với mong muốn tương tự. Hãy cùng MTA Vietnam tắt đèn từ 20:30-21:30 tối nay, thứ Bảy ngày 26/03/2022 và lắng nghe thông điệp hành động từ WWF toàn cầu trong Giờ Trái Đất 2022 nhé!
---------------------//
Join Earth Hour with MTA Vietnam To Shape Our Future

As the worlds largest environmental movement, Earth Hour has inspired and motivated individuals, communities, businesses and organizations in 190 countries and territories to take action for climate change and loss of natural environment. This is also an event in the sustainable development chain from Informa Markets with the same desire. Lets turn off the lights with MTA Vietnam from 20:30-21:30 tonight, Saturday, 26/03/2022 and listen to the message from WWF during Earth Hour 2022!

#earthhour #MTAVietnam #MTAHanoi  #Manufacturing #Engineeering #MTAVietnamserries #MTAVietnamGoesHybrid #ManufacturingIndustry #MTAVietnam2022
    3 months ago
    MTA VIETNAM

    MTA Vietnam 2022 Is Ready To Welcome The Return Of Our Exhibitors
    [Vietnamese below]
    With the latest news of ZERO QUARANTINE for international travelers entering Vietnam, MTA Vietnam 2022 is ready to welcome all of the international exhibiting companies to this year's exhibition at SECC, District 7, Ho Chi Minh City, Vietnam from 06-09/07/2022. MTA Vietnam is the leading prestigious exhibition of the engineering and manufacturing industry in Vietnam with a lot of experiences from organization to marketing promotion, promising in this return, MTA Vietnam will bring up many surprises to the community in and out of the country. Contact us to BOOK YOUR STAND NOW!
    ----------//
    MTA Vietnam 2022 Đã Sẵn Sàng Chào Đón Sự Trở Lại Của Các Nhà Trưng Bày

    Với những tin tức mới nhất về việc KHỒNG CẦN CÁCH LY đối với người nhập cảnh, MTA Vietnam 2022 đã sẵn sàng để chào đón các đơn vị trưng bày quốc tế đến với triển lãm năm nay tại SECC, Quận 7, tp. Hồ Chí Minh, Việt Nam từ 06-09/07/2022. MTA Vietnam là triển lãm uy tín hàng đầu trong ngành cơ khí chế tạo tại Việt Nam với nhiều kinh nghiệm từ khâu tổ chức đến quảng bá, tin chắc rằng sự trở lại lần này của MTA Vietnam sẽ làm cho cộng đồng cơ khí chế tạo trong và ngoài nước không khỏi bất ngờ. Liên hệ với chúng tôi để ĐĂNG KÝ GIAN HÀNG NGAY HÔM NAY!

    MTA Vietnam 2022
    ⏰ 06-09.07.2022
    📍 Trung tâm Hội chợ Triển lãm Sài Gòn - SECC, 799 Nguyễn Văn Linh, Quận 7, Tp. Hồ Chí Minh, Việt Nam
    ☎️ (+84) 28 3622 2588
    📩 [email protected]

    #MTAVietnam #MTAHanoi #Manufacturing #Engineeering #MTAVietnamserries #MTAVietnamGoesHybrid #ManufacturingIndustry #MTAVietnam2022
    ...

    MTA Vietnam 2022 Is Ready To Welcome The Return Of Our Exhibitors
[Vietnamese below]
With the latest news of ZERO QUARANTINE for international travelers entering Vietnam, MTA Vietnam 2022 is ready to welcome all of the international exhibiting companies to this years exhibition at SECC, District 7, Ho Chi Minh City, Vietnam from 06-09/07/2022. MTA Vietnam is the leading prestigious exhibition of the engineering and manufacturing industry in Vietnam with a lot of experiences from organization to marketing promotion, promising in this return, MTA Vietnam will bring up many surprises to the community in and out of the country. Contact us to BOOK YOUR STAND NOW!
----------//
MTA Vietnam 2022 Đã Sẵn Sàng Chào Đón Sự Trở Lại Của Các Nhà Trưng Bày

Với những tin tức mới nhất về việc KHỒNG CẦN CÁCH LY đối với người nhập cảnh, MTA Vietnam 2022 đã sẵn sàng để chào đón các đơn vị trưng bày quốc tế đến với triển lãm năm nay tại SECC, Quận 7, tp. Hồ Chí Minh, Việt Nam từ 06-09/07/2022. MTA Vietnam là triển lãm uy tín hàng đầu trong ngành cơ khí chế tạo tại Việt Nam với nhiều kinh nghiệm từ khâu tổ chức đến quảng bá, tin chắc rằng sự trở lại lần này của MTA Vietnam sẽ làm cho cộng đồng cơ khí chế tạo trong và ngoài nước không khỏi bất ngờ. Liên hệ với chúng tôi để ĐĂNG KÝ GIAN HÀNG NGAY HÔM NAY!

MTA Vietnam 2022
⏰ 06-09.07.2022
📍 Trung tâm Hội chợ Triển lãm Sài Gòn - SECC, 799 Nguyễn Văn Linh, Quận 7, Tp. Hồ Chí Minh, Việt Nam
☎️ (+84) 28 3622 2588
📩 mtavietnam@informa.com

#MTAVietnam #MTAHanoi  #Manufacturing #Engineeering #MTAVietnamserries #MTAVietnamGoesHybrid #ManufacturingIndustry #MTAVietnam2022
    Load more