HANOI: The localisation rate of products made in Vietnam is too low as the number of Vietnamese parts-supplying businesses account for only 3 per cent of the country’s total number of firms, said Phan Dang Tuat, former director of the Institute for Industrial Policy and Strategy. “We cannot build a parts-supplying industry with the limited firms,” Tuat said.
He yesterday told a Hanoi forum on developing the industry that Vietnam had 1,383 businesses operating as part suppliers out of a total of some 500,000 firms and they were divided into four groups – mechanics, electronics, rubber and plastic.
“Vietnam should promote the building of a start-up model for companies in the sector. Ministries and agencies should study how to establish more firms in the industry,” he added. Deputy Minister of Industry and Trade Hoang Quoc Vuong said that under a tariff cut, Vietnam would have opportunities to improve its competitiveness and exports to both traditional and new import markets as part of bilateral and multilateral free-trade agreements with important partners.
Vuong said this would be an opportunity for Vietnam to participate in global production and the global supply chain while making Vietnamese industrial products more diversified. Atsusuke Kawada, chief representative of Japan External Trade Organisation (JETRO), said the localisation rate in Vietnam was much lower than in Thailand, Indonesia and Malaysia.
A report from JETRO showed that the purchase of spare parts from Japanese firms in Vietnam last year was 32.1 per cent while the rate of 2014 was 22.4 per cent. However, the rate was lower than those of Japanese enterprises operating in China with 64.7 per cent, Thailand (55.5 per cent), Indonesia (40.5 per cent) and Malaysia (36 per cent).
Kawada said that the development of the parts-supplying industry in Vietnam had not seen clear improvement, though the country had priorities in this sector and a policy on human-resource training. He said that the priorities for parts supply for household appliances, office machines and automobile industry had been extremely important. He suggested expanding the production scale of automobile spare parts.
He said the Government should have clear policies in supporting Vietnamese enterprises which produced office equipment such as printers, and household appliances such as refrigerators and washing machines. Vietnam should nurture businesses producing spare parts to reduce imports from China, he said.
