Vietnam’s automotive industry and challenges

To help brands increase production and reduce automobile costs, the supporting industry is a prerequisite.However, so far, the automotive support industry still has many shortcomings to overcome.


Compared to the same period last year, in January 2023, the consumption of passenger cars in our country decreased by about 60%. This has caused heavy impacts on the automobile assembly industry, especially the ancillary industry market.

Mr. Phan Dang Tuat – Chairman of the Vietnam Association of Supporting Industries (Vasi) spoke at the seminar on auto parts and services industry Automechanika 2023 as follows: “The consumption of cars in Vietnam has not reached an average of 500,000 vehicles/year, the products mainly come from import and assembly. This makes it impossible for our auto industry to be complete. ”

At present, self-control is not feasible because Vietnamese enterprises have not been able to make a metal code on cars. This shows that Vietnam’s scientific and technical level still has many limitations, not strong enough to meet the support industry.

Along with that, when selling products, many parts manufacturing establishments also face some barriers, for example: According to the plan, 38 units are expected to own the IATF 16949 certificate (a set of quality management system standards in the automobile manufacturing industry) by the end of 2023. However, in order to promote the support industry in Vietnam, the above figure is considered too little.

In fact, domestic manufacturing and assembly groups acknowledge that the characteristics of the supporting industry are to create components for assembly, helping to create complete products, however, at present, most of the components for automobile production and assembly of the enterprise are dependent on imports. Up to now, enterprises have not been able to lead enterprises to produce essential components.

In addition, the Government has not yet issued appropriate policies to encourage the development of supporting industries. Looking at the world, it can be seen that in some countries with developed automobile industries such as Korea and Japan, laws related to the supporting industry have been gradually formed since the mid-twentieth century.

Meanwhile, in Vietnam, although the automobile market has undergone the process of formation and development for about 30 years, the Industrial Law is just beginning to be drafted. It can be said that the Supporting Industry Code is considered the core and soul of the country’s industry, but in this Code, there is only one chapter on Supporting Industry. This stagnation makes it difficult for the supporting industry to develop – Mr. Phan Dang Tuat commented.​

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