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UNIDO-TOKYO Jun2007 1/28 VIETNAM’S AUTO PARTS INDUSTRY AND INVESTMENT ENVIRONMENT Dr. Nguyen Xuan Chuan President Vietnam Society of Automotive Engineers
UNIDO-TOKYO Jun2007 1/28
VIETNAM’S AUTO PARTS INDUSTRY AND INVESTMENT ENVIRONMENT
Dr. Nguyen Xuan ChuanPresident
Vietnam Society of Automotive Engineers
UNIDO-TOKYO Jun2007 2/28
Content
1) Vietnam’s Auto Industry Present Status.2) Auto Parts Industry.3) Investment Environment.
UNIDO-TOKYO Jun2007 3/28
Development of Vietnam’s Autoindustry
352,
726
387,
546
443,
697
460,
914
523,
509
601,
529
655,
753
0
100000
200000
300000
400000
500000
600000
700000
2000 2001 2002 2003 2004 2005 2006
No of vehicle
• Vietnam’s autoregistration: Population 84 Mil.people, by 2025 reaching 100 Mil.
UNIDO-TOKYO Jun2007 4/28
VIETNAM AUTOPARK 2006
CATEGORIES
36%
12%
40%
7%
5%
PassCars Buses Trucks Special Other
UNIDO-TOKYO Jun2007 5/28
FDI auto joint ventures 1. MEKONG CORPORATION 1992 60mil.$ 10,000 2. VIETNAM MOTOR CORP. 1992 35mil.$ 10,900 3. VIDAMCO 1993 32mil.$ 10,000 4. VINASTAR 1994 50mil.$ 9,600 5. MERCEDES BENZ VN 1995 70mil.$ 11,000 6. VISUCO 1995 21mil.$ 12,400 7. VINDACO 1995 10mil.$ 3,600 8. FORD VIETNAM 1995 102mil.$ 20,000 9. CHRYSLER VIETNAM 1995 199mil.$ 17,000 10.TOYOTA VIETNAM 1995 89mil.$ 20,000 11.ISUZU VIETNAM 1995 50mil.$ 23,600 12.VIETSIN AUTO 1996 16mil.$ 2,200 13.HINO VIETNAM 1996 17mil.$ 1,760 14.NISSAN VIETNAM 1996 110MIL.$ 3,600 15.HONDA VIETNAM 2005 70MIL.$ 20,000 16.JRD MALAYSIA 2005 15MIL.$ 15,000 17.VMEP 2005 70MIL.$ 20,000
UNIDO-TOKYO Jun2007 6/28
Emerging of Vietnam’s autoassemblingenterprises
1. Cty cæ phÇn «t« Hyundai-Vinamotor 353,141 Bil.VND2. XÝ nghiÖp t- doanh Xu©n Kiªn 312,0003. Cty TNHH SX &LR «t« Chu Lai-Tr-êng H¶i 289,9254. Nhµ m¸y «t« Cöu Long 180,0005. CTy TNHH «t« Hoµng Trµ 165,7476. CTy TNHH «t« Hoa Mai 128,4787. Nhµ m¸y SX «t« 1/5 128,2588. Cty CP c¬ khÝ x©y dùng giao th«ng 74,3459. Cty XD&TM- XÝ nghiÖp LR «t« 74,27610. Cty TM&SXTB GTVT (TMT) 70,34011. Cty CKGTVT Saigon (SAMCO) 66,72612. CTy TNHH §øc Ph-¬ng 53,66613. Cty TNHH C¬ khÝ Thµnh C«ng 53,594
......continue
UNIDO-TOKYO Jun2007 7/28
Emerging of Vietnam’s autoassemblingenterprises
14. Cty CP C«ng nghiÖp «t« Tr-êng S¬n 52,27 Bil.VND15. Cty «t« vµ thiÕt bÞ ®iÖn§µ N½ng 50,78216. TRACIMEXCO- B¾c C¹n 49,40317. CTy XNK&HT ®µu t- GTVT 42,74418. Nhµ m¸y chÕ t¹o phô tïnh «t« xe m¸y DETECH 42,08419. Cty TNHH «t« ChiÕn th¾ng 41,83520. Cty CP kinh doanh hµng c«ng nghiÖp 31,90821. Cty CP vËn t¶i «t« Nam §Þnh 31,19922. Cty CK «t« xe m¸y Thanh Xu©n 30,788 23. Cty TNHH m¸y n«ng nghiÖp ViÖt Trung 28,20624. Cty CN «t« than ViÖtnam 28,04325. Cty CPCK «t« thèng nhÊt Thõa Thiªn-HuÕ 24,63326. Cty TNHH th-¬ng m¹i Hoµng Huy 23,28127. Cty c¬ khÝ «t« 3/2 21,00028. Cty CP HONLEI ViÖtnam 19,731
UNIDO-TOKYO Jun2007 8/28
Emerging of Vietnam’s autoassemblingenterprizes
29. TRACIMEXCO-Hµ Giang 19,100 Bil. VND30. Nhµ m¸y c¬ khÝ c«ng tr×nh 10,0431. VINAMOTOR - «t« Hoµ B×nh 8,32732. Cty c¬ khÝ «t« Ng« Gia Tù 5,00033. Cty CP xe kh¸ch vµ dÞch vô TM Dµ N½ng34. Cty CK «t« ViÖt Hµ35. Cty SX vµ LR «t« Tr-êng Thanh
There are still 10 autoassembling companies which have not accomplished the investment.
UNIDO-TOKYO Jun2007 9/28
Development of Vietnam’s Autoindustry
VAMA’s FDI members production
5,52
3
5,93
2
5,87
1
6,87
0
13,9
34
19,5
56
26,8
72 42,5
56
40,1
41
35,2
64
35,0
13
05000
1000015000200002500030000350004000045000
1996 1998 2000 2002 2004 2006
OTO
UNIDO-TOKYO Jun2007 10/28
Development of Vietnam’s Autoindustry
• Production of Vietnamese Enterprizes5,
927
650
6,96
372
0
13,7
1078
0
16,9
261,
362
24,5
503,
682
41,3
299,
307
40,1
418,
188
35,2
6430
,246
35,0
1324
,992
0
10000
20000
30000
40000
50000
60000
70000
1998 2000 2002 2004 2006
FDI JV Vietnamese
UNIDO-TOKYO Jun2007 11/28
Development of Vietnam’s Autoindustry
• Production and Import of automobiles
18,2
88 23,8
75
28,2
32
22,6
65
50,6
36
31,6
35
32,7
89 15,3
39
65,5
10
17,0
31 53,8
67
12,6
19
0
10000
20000
30000
40000
50000
60000
70000
2001 2002 2003 2004 2005 2006
productn import
UNIDO-TOKYO Jun2007 12/28
VIETNAM AUTOIMPORT 2006
AUTOIMPORT'05-'06BRAKEDOWN(17031-12619Units)
3,06
2
9,55
7
3,82
6
13,2
05
0
5000
10000
15000
New Used
2006 2005
UNIDO-TOKYO Jun2007 13/28
Auto Parts Industry• Vehicle distribution/1,000 people in 2004
Viet na m, 8
India , 22
Ch ina , 24
Ph il ippin, 25
Indo nesia , 38
Th a il a nd, 152
Ko r ea , 228
Ma l a y sia , 429
Ja pa n, 494USA, 682
USA Ja pa n Ma l a y sia Ko r eaTh a il a nd Indo nesia Ph il ippin Ch ina
UNIDO-TOKYO Jun2007 14/28
Development of Vietnam’s Autoindustry
Factors influencing autoindustry development in Vietnam::• Weakness of Vietnam’s infrastructure,• Relatively small automarket,• Importation of second hand automobiles,• Regional financial crisis,• Undeveloped supporting industry,• Process of global economic integration.
UNIDO-TOKYO Jun2007 15/28
Weakness of Vietnam’s infrastructure
• Vietnam’s road system consists of 210,447Km of roads, of which 169,005 Km are in coutryside, only 3,211Km are urban roads.Majority of roads are narrow,low quality.
• Scarcity of space (only 0.7%) for static transport in urban areas . (Hanoi is lacking of 400 ha for parking lots, HCM City needs 1,400 ha for parkings).
UNIDO-TOKYO Jun2007 16/28
Relatively small auto market
• Vietnam’s auto demand ~ 60,000 units/year (For 84 Mil. People). Vietnam’s present automobile park (658,000) is at the level of Japan in 1957.
• Vietnam’s vehicle distribution per 1,000 inhabitant is 8. (China- 24, Thailand - 152, Korea - 228, Malaysia –429),
UNIDO-TOKYO Jun2007 17/28
Importation of second hand automobiles
28,2
69 29,3
55
21,3
55
24,9
61
17,4
60
12,6
19
0
5,000
10,000
15,000
20,000
25,000
30,000
2001 2002 2003 2004 2005 2006
Quantity
UNIDO-TOKYO Jun2007 18/28
Undeveloped supporting industry• Presently there are around 40 FDI parts
makers and 30 local ones. Mega parts manufactures like DANA,Delphi,Bosch,Visteon,Valeo…. not present.
2,36
5
1033,
040
562
4,05
9
968
01,0002,0003,0004,0005,0006,000
2002 2003 2004
ASEAN CBU and Auto Parts trade
Parts CBU
UNIDO-TOKYO Jun2007 19/28
Process of global economic integration
• ASEAN and India,China have big auto market potential: : 2010 forcast ASEAN auto market –2.6Mil., India – 1.9Mil.,China - 9 Mil.units/year. Combined auto market equal to EU , US markets for 2010.
• Competition from ASEAN,Indian and Chinese makers. ASEAN-Korea FTA was concluded beginning 2007.
UNIDO-TOKYO Jun2007 20/28
Auto Parts Industry
Market size
FDI
Local
Part maker
Cost
Delivery
Quality
Com
petitive factors
Local Market
Parts Export
FDI sources
Cost reducing
Human resources
Sustainable business environment Tax policies
Information and knowledge gap
UNIDO-TOKYO Jun2007 21/28
Auto Parts Industry
• FDI auto parts makers
HI-LEX VIETNAM CO. LTD *
INOUE RUBBER VIETNAM CO.,LTD.-HO CHI MINH CITY JUST SPECIAL MATERIAL CO.,LTD. VIET NAM *
K.SOURCE VIETNAM CO. LTD LIEN HOA CO. LTD MANDARIN FOUNDRY CO.,LTD. MATSUO INDUSTRIAL VIETNAM INC *
MITSUBA M-TECH VIETNAM CO.,LTD. *
PRODUCTION SPARE-PARTS CO. J.V SUMI-HANEL WIRING SYSTEMS CO.,LTD. *
SUMI-HANEL WIRING SYSTEMS CO.,LTD. *
TAKANICHI VIETNAM CO. LTD *
UCHIYAMA VIETNAM INC. VIETNAM PRECISION INDUSTRIAL NO.1 CO., LTD.*
VIETNAM PRECISION INDUSTRY CO.,LTD. *
YAMATO POLYMER (VIETNAM) CO., LTD. *
YANG MIN ENTERPRISE VIETNAM CO.,LTD. YASAKI EDS VIETNAM LTD. *
UNIDO-TOKYO Jun2007 22/28
Auto Parts Industry
• FDI auto parts makers
AUTOMOBILE AND MOTORCYCLE PARTS MANUFACTURING J.V.C *
BROAD BRIGHT SAKURA INDUSTRY VIETNAM CHIU YI VIETNAM CO.,LTD. *
CHIUYI-LEAKLESS CO. *
DAE LIM KOREA CO. LTD DENSO MANUFACSTURING VIETNAM CO.,LTD FONG TAI CO.,LTD. *
GOSHI THANG LONG AUTO PARTS CO.,LTD. GS VIETNAM BATTERY CO.,LTD. *
HARADA INDUSTRIES VIETNAM *
SUMIDEN VIETNAM
UNIDO-TOKYO Jun2007 23/28
Auto Parts Industry
• Local auto parts makers
Công ty Cao Su Thống Nhất (RUTHIMEX) Công ty Cổ phần hỗ trợ phát triển công nghệ DETECH Công ty Điện máy và Kỹ thuật công nghệ (GELIMEX) Công ty TNHH Một Thành Viên Máy Nông Nghiệp Miền Nam (VIKYNO) Công ty TNHH Sản xuất - Thương mại Huy Hoàng Công ty TNHH Thương Mại Cơ Khí Tân Thanh Công ty TNHH Sản xuất - Thương mại Huy Hoàng C«ng ty TNHH-SX-TM Cao su nhùa T- ¬ng Lai Cơ Sở Ŀại Tân Công ty Chế Tạo Ŀộng Cơ (VINAPPRO) Công Ty Cổ Phần Kỹ Nghệ Lạnh Hoa Sáng Công ty Quan hệ Quốc tế và Ŀầu tư Sản xuất Công ty TNHH Nhà nước Một thành viên Thống Nhất Công ty TNHH SX & TM Vĩ Nam Việt Công ty Cao su Ŀà Nẵng Công ty Cổ Phần Công Nghiệp Cao Su Miền Nam - CASUMINA Công Ty Cổ Phần Ôtô Hyundai - Vinamotor Công ty TNHH Khóa Huy Hoàng Công ty TNHH Phụ tùng Xe máy D.N.N Công ty TNHH SX Cao Su Thành Danh
UNIDO-TOKYO Jun2007 24/28
Auto Parts Industry
Available autoparts:Tyre,tube.battery,aircons,shock absorber,antenna,leaf
spring,coil spring,lapms,wireharness,seat,brake,muffler.bearing,technical rubber partsChallengies for auto part industry:
1) Relativly small auto market (~60,000 units/year)2) Great variety of models :90 car’s and SUV’s models,70 bus
and truck’s models. 3) Raw material to be imported .4) Incentives insufficient.5) Lack of trained human resources. (only 20%professionally
trained)6) Lack of many industrial standards
UNIDO-TOKYO Jun2007 25/28
Auto Parts Industry
• Auto parts options?
1) Choice of standard common parts to off-set small local market.(Wheel,Drive shaft,…)
2) Choice of labour intensive parts (wire harness,seats..)
3) Choice of auto part made of local material supply or less material consuming parts.(FRP,Wirerharness…)
4) Choice of hi-tech,electronics parts.5) Choice of parts having export market.6) Call for mega auto parts
makers.(Bosh,DANA,Delphy,…)
UNIDO-TOKYO Jun2007 26/28
Investment Environment1) Decentralization of FDI licensing for projects under 20Mil.USD to
Provincial authorities.The lead time usually 10 days,maximum 1 month.Convenient infrastructure in the industrial parks .
2) WTO membeship of Vietnam makes our legal and business environments generally compliant with international ones.
3) Big wave of FDI inflow into Vietnam after its accession to WTO.2006 FDI record highest level of 10.6 Bil.USD. 2007 expected even 20 Bil.USD ( Taiwan Foxen to invest %Bil.USD to build industrial city in Bac Ninh, Sumitomo Group to invest into 2,640MW thermal power and 2 container ports in Khanh Hoa for 3.5-4Bil.USD).
4) According to WTO and BTA commitemnets, latest by 2012 all tax barriers to be dismentled.
UNIDO-TOKYO Jun2007 27/28
Investment Environment• Map of Industrial Parks
UNIDO-TOKYO Jun2007 28/28
Investment Environment1) Presently 97 industrial parks in operation (23
under expansion).2) 54 IPs under construction.3) Another 110 IPs planned for 2010 operation.4) Government spending annually 100Mil.USD
for ovearseas training of specialists,135Mil.USD for training of highly skilled workforce.
