The foreign direct investment (FDI) sector holds the lion’s share in Vietnam’s mechanical engineering exports, leaving a meager portion for local enterprises.

Nguyen Chi Sang, vice president of the Vietnam Association of Mechanical Industry (VAMI), highlighted this disparity during a conference focused on the export of mechanical goods. The conference was held on August 31 and attended by representatives from the Vietnamese trade offices abroad.

In 2022, Vietnam’s total revenue from machinery and equipment exports amounted to US$45.8 billion, a 19.46% surge from 2021. This was the highest sales volume recorded in the past decade and nearly 15 times that of 2010.

However, the export value of this sector was predominantly controlled by FDI enterprises, which contributed a staggering US$42.58 billion to the export value of machinery and equipment, accounting for 93% of the total.

The presence of Vietnamese-branded products remains very limited, with scarcity in production materials being a significant impediment to the growth of the mechanical engineering industry.

Currently, domestically manufactured metal components satisfy 85-90% of local motorcycle production demand, 15-40% of automotive production demand, 40-60% of agricultural machinery demand, and 40% of construction machinery demand. The supply of metal components for high-tech industries only meets 10% of the local demand.

Sang pointed out that the constraints facing Vietnamese mechanical engineering enterprises include an absence of conventional product lines, a lack of robust customer relationships, hesitancy to upscale production, and limited utilization of e-commerce for production and business purposes.

The association has recommended that Vietnam’s trade offices provide robust support to domestic enterprises in international markets, particularly in facilitating access to potential customers.

With approximately 30,000 enterprises, this industry has generated employment opportunities for over 1.2 million workers. Notably, in 2022, production growth in Vietnam’s mechanical industry was 16.5% against data reported in 2021.

Saigon Times