Korean firms look to invest in auto parts industry in Vietnam

Participants at the seminar (Photo: VNA)

Hanoi - Many businesses from the Republic of Korea (RoK) are looking to connect and get more information about the Vietnamese market as well as investment policies of the country, especially in auto parts, mechanics, and electronics, said Vu Ba Phu, Director of the Vietnam Trade Promotion Agency (Vietrade) under the Ministry of Industry and Trade (MoIT).

Speaking at seminar jointly held by Vietrade, the Korea Trade Investment Promotion Agency (KOTRA) and the Vietnam National Trade Fair and Advertising Company (Vinexad) in Hanoi on April 15 in the framework of the 30th International Trade Fair (Vietnam Expo 2021), Phu said this was a good opportunity for Vietnamese industrial parks and businesses to connect with Korean firms to attract investment and expand cooperation in developing value chains in manufacturing.

Auto parts manufacturing is one of the top areas attracting interest from businesses in Vietnam at present, Phu said.

Participant focused their discussions on policies for developing the automobile manufacturing and assembling industry in Vietnam, as well as how to form a sustainable manufacturing link chain in the auto parts sector.

Pham Tuan Anh, Deputy Director of the MoIT’s Industry Agency, said that a number of domestic firms have actively participated in the global automobile manufacturing chain.

Accordingly, the country’s total designed assembling capacity is about 755,000 vehicles per year, of which foreign-invested firms account for about 35 percent. Domestic manufacturing and assembling of many large firms have meet about 70 percent of the domestic automobile demand with the total output of passenger cars hitting 200,000 units per year.

However, Anh noted that the automobile manufacturing industry has not yet formed a system of large-scale suppliers of materials and components, which makes car prices in Vietnam still remain high compared to other countries in the region.

In order to further promote the domestic automobile manufacturing and assembling industry and help the auto parts manufacturing industry participate deeply in the global value chain, experts said attention should be paid to developing healthily the automobile market by creating a market large enough for domestic automobile manufacturers, and encouraging the use of locally-manufactured cars.

Vietnamese automobile manufactures should be supported more to improve their manufacturing ability and competitiveness, they added.