Foreign companies in the supporting industries are expanding their reach into Vietnam to tap into the huge automotive demand.
|Auto industry lures firms, illustration photo - source:internet |
Pairote Suttiprapa, general manager of Tech International Southeast Asia, said Vietnam is one of the firm’s key markets in Southeast Asia and the firm has enjoyed a growth rate of around 50 per cent over the last few years. “The country is home to over 45 million motorcycles, which more than doubles the 20 million motorcycles in Thailand,” Suttiprapa explained.
Tech International, the world’s leading producer of tire and tube repair kits, has been present in Vietnam for the last 15 years. Its import value to Vietnam reached $1 million last year.
The company has established a network of sales representatives and local distributors to consolidate business in the country. Tech International is increasingly promoting its repair products to large tyre shop chains, local workshops, as well as end consumers.
Meanwhile, Malaysia’s Hot Engineering, manufacturer of connecting rod kits for motorcycles, is stepping up its expansion plans. Manager Eric Heng told VIR that the company used to have plans to establish a factory in Vietnam. However, it has been facing some problems in finding local suppliers and a favorable manufacturing site. Also, the accessories for connecting rod kits are subject to a 30-per-cent duty tax, as compared to a 5-per-cent tax for the finished product.
Thus, the Malaysian supplier decided to postpone the factory in Vietnam and instead open a sales office. Heng said that the company is still pursuing its expansion plan in the Vietnamese market to capitalise on an accelerating
demand for automobile supporting industry. At present, the company exports around 20,000 units a year to Vietnam and is eager to raise this figure in the near future.
Over the past few years, Vietnam’s domestic automobile industry has achieved some major milestones, as some cars and components manufactured and assembled in Vietnam are now being exported to Laos, Cambodia, Myanmar, and Central America. Vinfast, under parent Vingroup, is considered a breath of fresh air for the industry, motivating the development of enterprises in the automobile industry.
As prospects are bright for Vietnam’s automotive market, more than 200 domestic and international enterprises gathered at the Saigon Autotech and Accessories Show 2018 (Saigon Autotech) to seek business opportunities.
David Wang, manager of Chassis Tech, said that the company is producing spare part components in Taiwan with a plan to expand into Southeast Asia. He noted that Vietnam is not only a gateway to the region, but also a market with great potential for investment, thanks to the country’s large population and favourable policies. Thus, the company is looking for local partners to assemble its accessories and components in the country.
Saigon Autotech returned for its 14th edition from May 24 to 27 at the Saigon Exhibition and Convention Centre in Ho Chi Minh City. Covering a space of 10,000 square metres, the four-day event showcased the latest automobiles, motorcycles, electric bikes, and spare parts. Other display fields include lighting, locking systems, and hydraulic brake systems with the aim of enhancing the diversification of products.
In addition, the exhibition is also a useful forum for enterprises and domestic and foreign partners to share experiences and promote products.