Recently, a number of mechanical products manufactured by Vietnam have had good quality, equivalent to that of some countries in the region.

Ample room for the supporting industry though low export

Currently, domestic mechanical enterprises have quite good capacity in a number of fields such as manufacturing molds of all kinds, mechanical and plastic components, power cables, technical rubber... The demand of the supporting industry market is very high, so many businesses have boldly invested to improve production capacity to serve Foreign Direct Investment (FDI) enterprises, targeting at exporting mechanical products.

According to statistics from the General Department of Customs, the export revenue of Vietnam’s mechanical products in 2022 reached US$57.78 billion, accounting for 15.6 percent of the country’s total export turnover. Many mechanical enterprises are expanding their export markets. For example, Thaco has exported cars, motorbikes and components to key markets like Northern America, Northern Europe, Australia, the Republic of Korea, Japan, and more.

Despite ample room for the supporting industry, market expansion for the domestic mechanical enterprises is still facing difficulties due to stiff competition from foreign businesses. Nguyen Chi Sang - Vice President and General Secretary of the Vietnam Association of Mechanical Industry, said that currently the import and export turnover of the mechanical industry is high, but most of them are from the FDI enterprise sector, while the proportion of Vietnamese enterprises remains modest.

Enterprises need to diversify products

According to economic experts, despite difficulties, there are still opportunities for Vietnamese businesses to dominate the export market. The important thing is they have to proactively adapt, diversify products, and meet partner’s requirements.

Truong Thi Chi Binh - Vice President and General Secretary of the Vietnam Association of Supporting Industries (VASI), said that this year, the mechanical products market decreased by about 20 percent in terms of orders. Some businesses saw their number of orders decrease more severely by 30 to 40 percent. However, the mechanical sector also has many new customers due to the shift in production. There are many production stages that Vietnamese enterprises are capable of competing with Chinese and Indian peers.

Nguyen Manh Hung - Chief Representative of the Vietnam Trade Promotion Office in New York, shared that the mechanical sector plays an important role in the US economy, especially the automobile manufacturing industry.

“Apart from being a large manufacturer of mechanical engineering, the US is also a country with diverse import needs. Imported products include industrial machines, civil aircraft, computers, semiconductor accessories, agricultural machinery, automobile parts, and more. Thus, there is still a lot of room to export to this market. Domestic businesses need to proactively source goods and comply with market regulations,” Hung said.

Ta Duc Minh - Commercial Counselor, Vietnam Trade Office in Japan, informed that Japan is currently implementing a new policy to avoid supply dependence on China and expanding to ASEAN countries, including Vietnam. This is a good opportunity for Vietnamese enterprises to approach Japanese partners in the coming time.

Vietnam Economic News