Việt Nam’s mechanical engineering market will reach $300 billion by 2030

VIETNAM, April 2 –

The mechanical industry plays a driving role in the development of other sectors. Photo congthuong.vn

HÀ NỘI — The total domestic mechanical market demand by 2030 is estimated at around US$300 billion, according to the Việt Nam Mechanical Enterprises Association (VAMI).

At present, Việt Nam’s mechanical industry only meets about a third of the demand for mechanical products in the country, the association said.

The demand for machinery and equipment for industrial projects such as thermal power, hydropower, chemical, mining and mineral processing is around $120 billion. Equipment and materials for the construction of the North-South high-speed rail system is valued at around $20 billion; the Subway (??), about $10 billion; and the auto industry, about $130 billion.

As a result, the development opportunity for Việt Nam’s engineering industry is substantial, according to the association.

At present, Việt Nam has signed many trade agreements and multinational companies are growing to find joint venture partners and set up production factories in Việt Nam.

The trend of shifting supply chains is a great opportunity for many businesses, including the mechanical engineering industry.

The Prime Minister has approved a strategy to develop the mechanical industry of Việt Nam by 2025.

The overall objective of this strategy is that by 2035, the mechanical engineering industry of Việt Nam will be developed with the key areas having advanced technology and product quality meeting international standards. At the same time, domestic mechanical engineering products will further participate in the global value chain.

The industry will also have a skilled workforce and actively develop the research, design and manufacture of mechanical products to meet the needs of the domestic market.

According to Lê Thu Quý, director of the Training Center of the Institute of Mechanical Engineering, to develop the national mechanical engineering industry, Việt Nam needs to determine the market demand and the areas in which the sector can be competitive.

Furthermore, to create favorable conditions for business development, mechanisms and policies need to be flexible to encourage businesses to invest in production expansion and localization. The State must be attentive to the development of metallurgical mechanics and support industries.

Economic expert Vũ Đình Ánh also suggested that to achieve the goal, it is necessary to have policies aimed at increasing the localization rate of the mechanical engineering industry, increasing the value of domestic production.

A representative of Thaco Auto said that to develop its mechanical field, the company has promoted the development of modern technology platforms and value chains from product research and development to production and supply. These are important factors for the company to improve product quality, reduce costs and create competitive advantages.

VAMI Chairman Đào Phan Long said that if the domestic machine-building industry wants to receive many orders and participate in the export chain, it must renew equipment and technology to manufacture spare parts. and components according to the demand of foreign partners.

In the future, the mechanical engineering industry will require the development of materials, molds, processing and manufacturing, not just cutting, so companies are forced to unite and deepen the value chain world, he said.

The Ministry of Industry and Commerce also said that to support mechanical enterprises, it will continue to improve the operational efficiency of two technical centers supporting industrial development in the North and South.

The two centers have helped some mechanical enterprises to train production and business management and increase their ability to meet international standards.

The centers also cooperated with multinational companies in Việt Nam such as Toyota, Mitsubishi and Canon to find suitable local suppliers to participate in the value chain of these companies.

In addition, the ministry will continue to develop support industries for national machine building industry.

According to the Ministry’s Industry Department, with about 25,000 mechanical enterprises in operation, accounting for nearly 30% of enterprises in Việt Nam’s processing and manufacturing industry, the national mechanical engineering industry has gradually increased the location rate.

Quý said that Việt Nam’s mechanical engineering industry has three strong subsectors: motorcycles and motorcycle spare parts, mechanics and household tools, and automobile and automobile parts. The three sub-sectors account for nearly 70 percent of the output value of the domestic mechanical engineering industry.

The industry produced and assembled almost every type of passenger car and truck. Motorcycle production has had a localization rate of 85-95%, meeting domestic and export demand. Typical companies in the automotive sector are Vinfast, Thành Công and Thaco.

However, Ánh pointed out that in addition to Vinfast, Thành Công and Thaco, the remaining popular domestic mechanical enterprises are small in size with low competitiveness and low-tech equipment.

In addition, product quality is not good, prices are high, and no key industrial products can compete with imported products.

According to VAMI, over the years a series of limitations and weaknesses in management, policies and the companies themselves have prevented the development of the mechanical industry from meeting market demands.

Therefore, many large projects in the fields of construction, transportation, irrigation works, oil and gas, maritime economy, shipbuilding, automobiles and motorcycles mainly used products machinery imported or manufactured by foreign direct investment enterprises. —VNS

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