In Vietnam, Toyota reaches the sale of 96,000 vehicles last year, of which 44% are assembled domestically with different models. (Photo courtesy of the firm) At the online trading session on supportingindustry of Vietnam and Japan on July 6, Vu Ba Phu, Director ofthe Vietnam Trade Promotion Agency under the Ministry ofIndustry and Trade (MoIT), said: “Over the years, supporting industryenterprises of Japan and Vietnam has been improving its production capacity andparticipating more and more deeply in the global production chain.”
Phu added that the number of enterprises operating in thesupporting industry accounts for nearly 4.5% of the total number ofenterprises in the processing and manufacturing industry, creating jobs formore than 600,000 employees, accounting for 8% of the total labour forcein the processing industry.
He said some Vietnamese component manufacturing enterpriseshave quite good capabilities in such areas as manufacturing moulds of allkinds such as bicycle and motorcycle components, standardmechanical components, power cable, plastic components of technicalrubber and tires.
“But the number of Vietnamese enterprises becoming suppliers ofsupporting industrial products for Japanese enterprises is limited,” hesaid
At the session, Akutsu Michio, an expert of the JapanTrade Advisors Association, said: “First, the labour productivity of localworkers in Vietnam is still low.”
The expert quoted JETRO’s report, saying the labourquality rate only reached 14.4%, adding: “It is a matter of concern.”
He said Vietnamese talent with high technical skills attracted byFDI enterprises went abroad to work, leading to a shortage of good humanresources in the local companies.
He added that the financial capacity of Vietnameseenterprises was still weak while the assessment of capital wasalso tricky; as a result, enterprises found difficulty finding rawmaterials at competitive prices and a lack of information from foreignsuppliers.
Truong Thi Chi Binh, General Secretary of the VietnamAssociation of Supporting Industries (VASI), said: “Vietnam currently hassix priority industries to develop supporting industries, includingelectricity, electronics and mechanical engineering.”
Binh said among the mechanicalengineering industry, the motorcycle manufacturing industry, whose outputhas decreased in the past year to 2.5 million vehicles per year,still has the best production and localisation rate as well asthe participation of Vietnamese enterprises in all supply layers, productclasses such as electricity, electronics, rubber and plastic.
Next was the automotive industry which stood outwith the Toyota brand. The output of the industry was much lower than thatof the motorcycle industry, said Bình, adding it was the reason why theauto industry had a low domestic rate and rarely had the participationof Vietnamese enterprises.
According to Toyota, last year, its sale reached 96,000vehicles in Vietnam, of which 44% were assembled domestically withdifferent models.
Binh from VASI considered Vietnamese enterprisescould only supply plastic components to car companies because these arebulky components and have large logistics costs, so they were forcedto be localised.
At the session, experts said though the mobilephones industry accounts for nearly 20% of the export share ofindustries, the contribution in mobile phone components of Vietnameseenterprises were still plastic and rubber as electronic componentswere supplied mainly by FDI enterprises, said the VASI leader.
Binh said: “Vietnamese enterprises are currently only ableto produce single components, but have not yet been able to produce componentsapart from some machinery in the construction industry.”
“In the last five years, the movement of factories producingsupporting industrial products to Vietnam has been clear. To supportbusinesses, the association has focused on finding solutions to move forward inthe supply chain by forming business groups and sector groups to focus onincreasing the quantity and quality of production.”
She added that the supply chain shift from China wouldbring more orders, which could be larger than the number of productsdomestic enterprises were producing in Vietnam.
Binh said VASI started forming a business group to producecomponents, hoping to create the first example and participate more deeplyin the supply chain of public products.
Mentioning solutions to overcome the weaknesses of Vietnamesesuppliers, Akutsu Michio said: “Vietnam can take advantage ofthe commercial companies, which can supply raw materials atcompetitive prices, assist in customs clearance, propose new productionmethods, mechanise and automate for manufacturing and assembly enterprises.”
“If something goes wrong, they coordinate with the supplier andthe assembly plant to propose a solution. Moreover, they can provideinformation that is not publicly available on the Internet such as on capitalinvestment, and new product development programmes.”/.
VNA
