Vietnamese automobile manufacturers growing up to the task

The grand opening of the Thaco Mazda plant in the presence of Prime Minister Nguyen Xuan Phuc and ministry and privincial leaders

Truong Hai Auto JSC's (THACO)’s Thaco Mazda automobile manufacturing plant were inaugurated in Chu Lai, Quang Nam yesterday (March 25). The facility will be invested VND12 trillion ($528.6 million) to manufacture and assembly Mazda-brand automobiles with the capacity of 100,000 vehicles annually.

After a year, the first phase of the project has been completed with half of the designed capacity of 200,000 units per year, and Thaco spent three years to research products and manufacturing process. Covering 30.3 hectares in Chu Lai Open Economic Zone, the plant is equipped with cutting-edge technology, meeting the global standards of Japan’s Mazda Group.

Tran Ba Duong, chairman of THACO, said the group will refurbish almost all automobile manufacturing and assembly plants, including the Kia, Mazda premium tourism cars, bus, and parts manufacturing plants to raise localisation rate to over 40 per cent before exporting to the ASEAN region.

Moreover, the group plans to build another wharf and has invested VND600 billion ($26.43 million) into expanding the arterial road from the Chu Lai Port to Danang-Quang Ngai Expressway and building a double-decker roundabout interchange between National Highway 1A, the North-South Railway, and the arterial road.

Also on March 25, Thaco inaugurated an international shipping route linking Chu Lai and Japan, and welcomed the first vessel transporting automobile spare parts and equipment from Japan’s Hiroshima prefecture to Chu Lai Port to serve the new factory.

Prime Minister Nguyen Xuan Phuc visited the manufacture chains of the plant

Thaco is not alone in pouring money into the automobile manufacturing industry, Hyundai Motor and Thanh Cong Group have also been doing their utmost to complete the second large-scale factory in Ninh Binh in order to make Hyundai Thanh Cong the leading automobile brand in the ASEAN. The joint venture factory between Huyndai Thanh Cong and Huyndai Motor (HTMV) is currently operating at the capacity of over 60,000 vehicles annually.

Byung Kwon Rhim, senior deputy general director of Huyndai Motor, said that the company sees opportunities and potential for development in Vietnam and the ASEAN. This is the reason why Huyndai Motor aims to expand in the Asia-Pacific region, especially in Vietnam.

Recently, Vinfast has just offered 36 designs, including 17 electric designs and 19 hatchback designs made by four leading automobile designers Ital Design, One One Lab, Pininfarina, and Torino Design. According to plan, VinFast will release the winning designs in 2019, one year ahead the estimate. The company has also accomplished working tasks quickly, such as the construction of its factory in Dinh Vu-Cat Hai Economic Zone, Haiphong city.

The first Mazda automobiles made by Thaco Mazda plant

Domestic automobile manufacturers have clearly realised that the Vietnamese automobile industry is rising to the same stage as other ASEAN members like Thailand, Indonesia, and Malaysia, which have large automobile markets and developed automobile industries.

Thereby, Tran Ba Duong confirmed that Thaco is focusing on environmentally friendly products, using electricity and manufacturing technology based on Industry 4.0.

He also said that there is great investment into industry in general and the automobile industry in particular, but returns are diminishing in the face of the continuous need to reinvest to keep manufacturing lines up to date.

“The profit of VND7 trillion ($308.4 million) per year is too small compared to the VND30 trillion ($1.32 billion) investment demand in 2016-2018,” Duong added.