Big market
Mechanical export and mechanical engineering in general have quite a large market. Former Vice Chairman of the National Assembly Phung Quoc Hien commented: In the coming time, we will implement many important large projects with a large total investment such as: Electricity planning for the period 2021 – 2030 of about 133 billion USD, railway North-South high-speed 50 to 60 billion USD, Long Thanh International Airport, inner-city railway lines, traffic works, irrigation, oil and gas, marine economy, shipbuilding, automobiles, motorbike…
According to the Department of Industry (Ministry of Industry and Trade), there are about 25,000 active mechanical enterprises, accounting for nearly 30% of the total number of processing and manufacturing enterprises in Vietnam and concentrated in three sub-sectors, including motorbikes. and motorbike spare parts and components; household mechanics and tools; automobiles and auto parts. These three sub-sectors account for nearly 70% of the total industrial production value of mechanical engineering nationwide.
Recently, a number of mechanical products have been produced with good quality, equivalent to the quality of products of some countries in the region. Currently, domestic mechanical components manufacturing enterprises have quite good capacity in a number of fields such as: Molds of all kinds, mechanical components, electric cables, plastic components, technical rubber… The demand of the supporting industry market is very large, so many businesses have boldly invested to improve production capacity, focusing on developing quality product lines, serving foreign direct investment businesses, and focusing on developing quality products. into exporting mechanical products.
With those efforts, domestically produced metal components have met 85-90% of demand for motorbike production; about 15-40% of the demand for components for automobile production (depending on vehicle type), about 20% for synchronous equipment production and 40-60% for the production of agricultural machines, engines and 40% % for construction machines. Supplying metal components to high-tech industries currently meets about 10% of demand.
At the same time, a number of domestic private mechanical industry corporations with good potential have been formed and developed. Typical corporations are VinGroup, Truong Hai, Thanh Cong; Hoa Sen, Hoa Phat, Hoa Binh Minh Co., Ltd., Pomina Steel Company, Nam Kim Steel Joint Stock Company… These are good signs showing that the Party’s general policies and the Government’s policy mechanisms have been implemented. creating trust and excitement for businesses to focus on large, long-term development investments in the country’s key industries.
Mechanical export support
However, the self-reliance capacity of the industry in general, including exported mechanical engineering, is still not high. Regarding the market, the Mechanical industry is diverse in products but competition from imported products is relatively fierce. Market expansion still faces many difficulties due to lack of market information and the competitiveness of domestic enterprises is not strong enough. Even in the domestic market, it is difficult for mechanical enterprises to participate in investment projects to install equipment in the steel, chemical, and energy industries, mainly due to the lack of a quality inspection system. product quality according to international standards; Domestic mechanical businesses and products have not yet built their brands and become known to many potential customers.
Regarding technology, Vietnam’s Mechanical Engineering industry has very few registered inventions and inventions, equipment and technology levels throughout the industry are slow to innovate. Mechanical enterprises lack output for products, so they do not have the opportunity to accumulate and invest in technological innovation. Regarding raw materials, mainly iron and steel and non-ferrous alloys, most of these raw materials cannot be produced domestically so they must be imported.
Regarding human resources, they are lacking and weak in both quantity and quality. The number of highly skilled mechanics has decreased, and professional workers lack international vocational certificates and foreign language skills. The research and implementation force, first of all the design consulting team, is not qualified to meet the requirements of works and projects on synchronous mechanical equipment.
In fact, according to statistics from the General Department of Customs, the export of mechanical products, represented by the group of machinery, equipment, tools and spare parts, is currently the third largest export group of Vietnam. South, in 2022 has a turnover of 45.72 billion USD; and the group of transportation vehicles and spare parts has a turnover of 12.06 billion USD. The turnover value of these two mechanical export groups is 57.78 billion USD, accounting for 15.6% of the country’s total export turnover. Many mechanical enterprises are increasingly expanding their export markets. Typically, Thaco has exported cars, motorbikes, and components such as racing car seat frames, springs, radiators, trunks, specialized tanks, truck cranes, bodies, seat covers, and trunks. vehicles, pickup truck chassis, coolers, plastic tanks, hydroponic plastic pipes… to key markets such as: North America, Northern Europe, Australia, Korea, Japan, Malaysia, Cambodia, Israel. In 2022, the Group’s export revenue is nearly 190 million USD and the 2023 plan is more than 375 million USD.
Aiming for the period by 2025, mechanical export output will reach 40% of the total industry output, and by 2035 it will reach 45% of the total mechanical industry output, according to Decision 319/QD-TTg of the Prime Minister approving Approved the Strategy for developing Vietnam’s mechanical industry to 2025, with a vision to 2035, to support mechanical enterprises, in the coming years, the Ministry will continue to strengthen and improve the operational efficiency of the 2 Technical Centers. Technical support for industrial development in the North and South. Currently, these two Centers have activities to support mechanical industry enterprises in a number of localities across the country such as supporting training in production management systems and business management systems; Improve capacity to meet international standards. The Centers are actively cooperating with multinational corporations present in Vietnam such as Toyota, Mitsubishi, and Canon to find suitable suppliers to participate in the value chains of these corporations.
In addition, the Ministry of Industry and Trade will continue to strongly develop downstream industry; including a number of industries such as the energy industry, precision mechanical industries as well as a number of mechanical manufacturing industries to ensure that supporting industries have conditions to develop… In particular, focusing on Focus on effectively implementing scientific and technological tasks, prioritize the implementation of tasks along the value chain, encourage the mastery and transfer of technology in the mechanical industry such as heat treatment technology; technology for manufacturing high-precision molds, machine tools, agricultural machines, spare parts, automobile engines and mechanical spare parts, railway transportation, steel manufacturing, precision mechanics and automation; Processing and preservation technology…
At the same time, the Ministry proactively cooperates internationally in training human resources for supporting industries, including the mechanical industry. Specifically, the Ministry of Industry and Trade coordinates with representatives of the Japanese Ministry of Energy, Trade and Industry (METI) to plan to implement cooperation activities in the field of automobile industry and supporting industries in the following years. next year. The two sides agreed to cooperate to support Vietnamese supporting industry enterprises, such as: Project “Support to improve the capacity of Vietnamese supporting industry enterprises” (SME Promotion & Industrial Development project) by JICA perform; The program “Training for Vietnamese auto parts manufacturers” is implemented by the Association for Overseas Technical Cooperation and Sustainable Partnerships -AOTS; and sent a number of experts to support the Industrial Development Support Centers under the Department of Industry (Ministry of Industry and Trade) in operating and improving human resources.
Cooperating in Vietnam’s Industrialization Strategy within the framework of Vietnam – Japan cooperation towards 2020, vision 2030, the Ministry of Industry and Trade participated in the Meeting chaired by the Ministry of Planning and Investment on evaluating Reassess the suitability of 6 priority development industries (Electronics; Agricultural machinery; Agricultural and fishery processing; Shipbuilding; Environment and energy saving; Automobile and auto parts manufacturing) and regulate Adjust the content of Vietnam’s Industrialization Strategy within the framework of Vietnam – Japan cooperation towards 2025, vision 2035. The Ministry of Industry and Trade has proposed that the Strategy should continue to promote the development of priority industries. Priorities include Electronics, Automobile and auto parts production through completing investment incentive policy mechanisms, credit incentive policies, … and organizing the implementation of industrial development programs. Specific industrial support for priority industries for development.
The above support and cooperation programs will contribute to improving competitiveness and opening up opportunities for mechanical export and the mechanical market in general.
(Source: Industry and Trade Newspaper)
