Seminar: Creating markets for enterprises in the mechanical and automation industry

On the morning of July 7th, 2023, Vietnam Industry Agency (VIA), in cooperation with Vietnam Association of Mechanical Industry (VAMI), held the conference “Creating market for mechanical and automation enterprises”.

Attending the event, on the side of Vietnam Industry Agency, Ministry of Industry and Trade, there was Mr. Pham Tuan Anh – Deputy Director; On the side of Vietnam Association of Mechanical Industry (VAMI), there was Mr. Nguyen Chi Sang – Vice President, General Secretary of the Association. In addition, the conference was also honored to welcome Mr. Ninh Huu Chan – General Secretary of Vietnam Automobile Manufacturers’ Association (VAMA) and representatives of companies in the mechanical and automation industries.


The seminar “Creating markets for enterprises in the mechanical and automation industry” was organized to discuss, share experiences, and propose solutions to overcome difficulties; At the same time, evaluate and make comments on creating markets for mechanical and automation businesses, thereby promoting the internal capabilities of businesses and improving Vietnam’s position in the global value chain. 


Objectives of the Strategy for Developing Vietnam’s mechanical industry according to Decision No. 319/QD-TTg of the Prime Minister until 2025, with a vision to 2035 set out, by 2025 the mechanical industry will be developed with the majority of specialized industries with advanced technology, product quality meeting international standards, participating more deeply in global value; By 2030, it will reach 40% of the total output of the mechanical industry, and by 2035, it will reach 45% of the total output of the mechanical industry.


Specifically, by 2025, focus on developing a number of sub-sectors of automobile mechanics, tractors, agricultural machinery, and construction equipment; After 2025, a number of consulting and manufacturing contractor combinations will be formed capable of mastering the design and manufacturing of auxiliary equipment groups and EPC packages of industrial projects; Forming a number of consulting and manufacturing contractors capable of mastering the design and manufacturing of auxiliary equipment for industrial projects…


Speaking at the seminar, Mr. Pham Tuan Anh emphasized that mechanical engineering has recently been a fundamental industry that has received special attention from the Party and State, becoming one of the key sectors of the economy.


According to Mr. Pham Tuan Anh, the domestic mechanical engineering industry gradually masters and increases the localization rate, creating a driving force for industry and economic development, thereby directly and indirectly creating jobs for million workers. However, “mechanical enterprises are facing limitations, such as relatively fierce competition from imported products, lack of market information, and the competitiveness of domestic enterprises is not strong enough” – Mr. Pham Tuan Anh pointed out.


In reality, according to Mr. Pham Tuan Anh, businesses need to be more proactive in changing thinking and innovating technology to create competitive advantages with foreign products. “Believe that with the unanimous determination of the Government, ministries, branches, associations and businesses, the competitiveness of Vietnamese businesses will be strongly developed, gradually increasing the ability to participate in global value chain; helps the mechanical industry in particular and Vietnamese industry in general develop, contributing to increasing added value for the economy” – Mr. Pham Tuan Anh said.


Due to the impact of the pandemic and most recently the war between Russia and Ukraine, Nguyen Chi Sang – Vice President and General Secretary of VAMI stated the current situation, the mechanical engineering industry is currently facing a decline in orders from both domestic and foreign. “With the impact of the pandemic, the number of industrial projects being started decreased, causing fewer domestic orders, and the impact of the Russia-Ukraine war causing orders to decline. In general, businesses and mechanical engineering enterprises are having to find every measure to keep their businesses alive and growing” 


Therefore, Mr. Nguyen Chi Sang emphasizes the importance of the Government, ministries, and sectors in issuing appropriate mechanisms and policies to promote market innovation and provide direction for business development. According to Mr. Sang, innovation in job creation should consider the long-term and short-term interests of the state, investors, and contractors; protecting the market only for industries producing products and fields with large market demand, which significantly affect the economy and businesses.


In addition, the VAMI Association proposes some recommendations for building a comprehensive strategy for the development of the industrial sector, especially those with significant investment value; continuing support programs with necessary additional policy mechanisms and updates; adjusting some laws and regulations such as removing redundant licenses for production and business activities, reconsidering taxation for finished products, and abolishing professional certification for individuals trained in the relevant field.


On the side of VAMA Association, Mr. Ninh Huu Chan – General Secretary also has remarks and shares about developing suppliers to gradually participate in the automotive industry supply chain. Specifically, when addressing the component manufacturing sector for the automotive industry, Mr. Chan believes that alongside advantages such as high-quality labor force, low costs, and reduced transportation expenses, the manufacturing sector also faces challenges regarding market scale, shortages in the materials industry, and management experience. At the same time, the VAMA Association also provides insights into the supporting industry during the transition to electric vehicles – one of the current topics of interest.


At the seminar, some businesses in the mechanical and automation industry also shared the challenges they are facing in their production and business processes. At the same time, they proposed several solutions to overcome these difficulties and support the development of the mechanical industry to create breakthroughs in the future.

A representative of Vietnam Railway Corporation said that this unit is managing and using 258 locomotives, 980 passenger cars and 4,318 freight cars. Currently, most of the factories and warehouses serving the railway industry’s production are degraded; The number of new factories is still small and cannot meet the very low annual capacity of building, repairing and producing spare parts for rolling stock.

On the other hand, according to the Vietnam Railways Corporation, industrial facilities are relatively modest in size and have limited participation in the mechanical market. “The cost of spare parts for manufacturing and repairing locomotives is high, with about 80% of the demand needing to be imported annually, while industrial facilities can only meet a small proportion due to outdated machinery, equipment, and technology,” a representative said.

To address the current challenges and promote the development of the railway mechanical industry, the Vietnam Railways Corporation proposes policies to support the development of material technology, streamline procedures for borrowing capital, prioritize the development and consumption of railway industry products, offer import tax incentives, and attract investment for science and technology development in the railway industry.

Representative of Doosan Vina Company, one of the most successful FDI enterprises in Quang Ngai province – Mr. Kim Hyo Tae – CEO emphasized that Vietnam’s economic and industrial foundation lies in manufacturing, with the mechanical industry being crucial, essential, and capable of creating high added value.

To protect and develop Vietnam’s mechanical industry ecosystem, Doosan Vina proposes strengthening domestic localization policies to build energy security and the mechanical industry ecosystem in Vietnam, enhancing tax incentives to protect domestic companies, and supporting infrastructure for companies entering new and renewable energy industries. “Countries around the world offer many tax incentive policies to help their companies compete with those from other countries. Therefore, it is hoped that some of Vietnam’s tax policies will be improved to protect domestic companies,” Mr. Kim Hyo Tae suggested.

Within the framework of the workshop, aimed at promoting the development of Vietnam’s mechanical industry, creating new orders for domestic businesses, some companies participated in exhibiting products and auxiliary components from industrial support enterprises.



Share New