How can Vietnam's auto industry participate in the global supply chain?

Nguyen Le - Jun 29, 2017 | 04:08 PM GMT+7

TheLEADERAccording to Vietnam Business Forum (VBF), the priority is to increase the size of the market to ensure that the car industry will be maintained in the future.

How can Vietnam's auto industry participate in the global supply chain?
Suppliers should be active to join the chain. Photo: TL

The Automotive Working Group of Vietnam Business Forum believes that it is essential to develop a stable growth market with consistent and long-term automotive policies on tax system and infrastructure.

In addition, efforts on media should be made to reach public consensus for these policies.

Instead going fast to become first-tier suppliers in the short term, domestic component suppliers should ensure to meet production and service requirements (QCD) as secondary and tertiary suppliers and cooperate with foreign suppliers as a way to develop their business an manufacturing of components or to transfer technology.

By doing so, domestic suppliers will gradually understand the production requirements of foreign direct investment enterprises and actively take advantage of those opportunities to enhance their competitiveness.

To participate in the global supply chain in the automotive industry, domestic producers need to improve quality, cost, delivery issues by enhancing quality and productivity, cutting costs, improving management capacity and complying international rules and laws.

Foreign direct investment enterprises should provide guidance to suppliers including the criteria to become their suppliers, in order to help potential domestic suppliers to improve their quality, cost, delivery (eg: sending experts to local suppliers), and to transfer technology.

Enterprises should continue to negotiate with existing suppliers to expand the components catalogs that can be localized.

Suppliers should be active to join the chain

Automobile manufacturers or foreign-invested suppliers should have opened policies to co-operate with suppliers that meet the mentioned requirements.

The government should have a mechanism to attract foreign suppliers to Vietnam in order to improve the capacity of domestic producers and encourage domestic firms to invest in the production of automotive components.