Auto parts manufactured at a Vietnam Motors and Agricultural Machinery Corporation factory. (Photo: baotintuc.vn) Only Toyota and Hyundai crossed the threshold in 2021, with 64,172 and 56,028vehicles, respectively.
Meanwhile, Kia fell short of the threshold with just 35,181 vehicles. VinFastfollowed with 34,746 and Mitsubishi with 26,346.
Truong Thi Chi Binh, an expert at Vietnam Institute of Strategy and Policy forIndustry and Trade, underlined the low level of car production as a setback forthe Vietnamese auto part industry.
She said low production meant low demand for domestic auto parts, discouragingsuppliers from investing in new production lines.
Without new production lines, the suppliers become less competitive in price asthey cannot achieve economies of scale.
Consequently, car producers have to find their auto parts elsewhere.
“Since auto production is insufficient to encourage domestic auto partsproduction, many car producers have no choice but to import their inputs,” Binhsaid.
The expert believes that Vietnam should introduce favourable policies to boostthe growth of the domestic industry.
Otherwise, Vietnamese suppliers will be priced out of the market by foreigncompetitors.
The general director of a Japanese auto producer shared the view. He pointedout that car parts prices in Vietnam are two to three times higher than thosein other regional countries.
Auto producers in Thailand purchase just 10 percent of car parts from abroad.They get the rest from around 3,000 Thai suppliers.
Meanwhile, auto producers in Vietnam have to import 80-85 percent of car parts,effectively reducing the number of Vietnamese suppliers to around 300.
The general director called for more favourable policies to encourage domesticproduction of auto parts, particularly medium-sized steel and plastic parts.
Two experts at the Faculty of Economics, Vinh University, revealed that onaverage, an auto producer buys car parts from two domestic suppliers.
With over 90 percent of suppliers in Vietnam being FDI firms, Vietnamese firmstake up a minority.
According to the Vietnam Register, 318,704 cars were sold and registered in Vietnamin 2021, higher than the figures in 2020 (296,634) but lower than in 2019(322,322)./.
VNA
