The picture of the supporting industry for Vietnam’s auto sector is not that bright due to slow development in both quantity and quality compared to many countries in the region.

According to the Ministry of Industry and Trade (MoIT), only a few domestic suppliers can take part in the supply chains of automobile manufacturers and assemblers in Vietnam. Auto parts and components produced in Vietnam are mainly labor-intensive items with simple technology, such as seats, tires, and wheels, etc. Vietnam must import almost all component products with high technology content and added value, especially key parts and components.

In order to improve the capacity of the local supporting industry, MoIT said it is necessary to provide access to capital for least three centers in three regions.

Investment is also needed for manufacturers and suppliers of components from around the world, especially multinational corporations in Vietnam, to serve the domestic market and ASEAN.

Specific preferential and support policies are needed to encourage major export processing enterprises to sell domestically, seek opportunities in the domestic market, and develop the local supply chain for the country’s automotive industry.

Promoting major projects in the materials industry, especially projects of domestic investors producing hot rolled steel and fabricated steel, etc., would also ensure the supply of input materials for the supporting industry.