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Commercial vehicles: the playing field of Vietnamese manufacturers
Trucks, commercial vehicles and specialised vehicles will remain the biggest advantages of Vietnamese automobile manufacturers.
Chairman of the Vietnam Automobile Engineers’ Association Du Quoc Thinh believes that local manufacturers will be the main players in the commercial vehicle market, while imports will dominate the car market.
Could you please describe the panorama of Vietnam’s automobile market?
Commercial and specialised vehicles now account for 65-70% of the total output of vehicles assembled domestically, while the other 30-35% is cars.
Statistics show that in 2007, local automobile manufacturers, including joint ventures, churned out and sold more than 80,000 units, and the figure is expected to rise to over 100,000 units by 2010.
The noteworthy thing is that the segment of buses, trucks and specialised vehicles is now dominated by domestically-owned enterprises. The products have high localisation ratios and good sales and post-sales services. That explains why the imports of these types of vehicles have been modest.
Meanwhile, cars with less than 9 seats, especially sedans, are absolutely not the advantage of domestic manufacturers. I think that car consumption will increasingly high, while cars will become more and more expensive.
Therefore, I think that the car market will still grow well with the importers dominating the market, while the segment of commercial vehicles belongs to Vietnamese manufacturers.
What do you think are the biggest difficulties for Vietnam’s automobile industry?
The overly small market proves to be the big difficulty for the industry. The industry still does not have enough necessary factors to become a real automobile industry.
Currently, every automobile plant operates separately, while they do not assist each other in terms of capital, technology and human resources. They should shake hands with each other to cut down expenses in human resources and technologies.
There is a growing tendency in the world that manufacturers join forces to form big groups, which allow them to use each other’s capital, technologies and human resources, thus allowing them to save up to 30% of production costs.
For example, some Japanese plants have joined the US’ Ford, while some US plants have joined Toyota. I mean that Ford is not purely the American and Toyota purely the Japanese manufacturer.
Meanwhile, in Vietnam, every manufacturer needs to do everything itself, from the smallest to the biggest thing in the production chain.
Experts talk much about the weakness of the supporting industries, which they consider the main reason behind the slow formation of a real automobile industry in Vietnam. What do you think about that?
Supporting industries really are a big problem for Vietnam’s automobile industry. We still cannot develop supporting industries, not only to serve automobile industry, but other industries as well.
As the market remains small, every manufacturer holds a small market share, and no manufacturer can sell 10,000 units a year. Meanwhile, supporting industries demand a big numbers of cars of the same brand names.
Another problem that makes investors uninterested in investing in workshops specialising in making car parts for manufacturers is lack of capital. Investors only need to spend several million dollars to set up an assembling workshop, while they have to spend tens of millions of dollars to set up a workshop to make car parts.
HoSE
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