Featured Image

Automotive Production Trends Post-COVID-19: Vietnam

While Vietnam currently features a low automobile ownership rate, Vietnam's growing middle class is expected to increase demand. COVID-19 may have stunted growth of the market in the short term; however, the continued development of the country's middle...
Jul 15, 2021

A growing country in the automotive industry supply chain, Vietnam has observed various trends as it expands domestic automobile production. Primarily, Vietnam welcomed its first domestic automobile production factoryin 2019 with the company Vingroup. 

The demand for auto parts and products will only continue to increase in Vietnam, despite the coronavirus pandemic, as companies have begun to shift automobile production domestically. Moreover, several countries are currently pursuing diversification of the supply chain away from China. 

While Vietnam currently features a low automobile ownership rate, Vietnam's growing middle class is expected to increase demand. COVID-19 may have stunted growth of the market in the short term; however, the continued development of the country's middle class is expected to override the economic detriment caused by the pandemic. Additionally, the automotive industry trend has suggested continued growth as Vietnam's automotive production has grown 10% per year from 2015 to 2018. Major automotive players such as Kia, Toyota, and Honda have already established themselves in the Vietnamese market, and addition to these market players should continue.

 Supply Chain Operational Shifts

In the midst of the pandemic, the main shift in Vietnam has involved moving production of automobiles in country and encouraging larger companies to enter as well. Vietnam is a desirable location along the supply chain due to low barriers for trade and accessibility to ASEAN markets. Large manufacturers such as Honda, Toyota, Nissan, and Ford have all moved into Vietnam for the first time; however, COVID-19 halted production temporarily. Another change in the Vietnamese supply chain is higher levels of global integration. While most markets and industries suffered as a result of COVID-19, Vietnam displayed its emergence in the global market as exports expanded by 8% in the first two months of 2020.

More recently, Vingroup announced a push into the U.S. automotive market, indicating their plans to acquire a share of the luxury car segment, including electric cars, and possibly investing in a manufacturing plant.

The information provided in this article is based on research and report provided by George Washington University – CIBER Bootcamp and commissioned by IBDGi on behalf of AMT for the publication of the white paper Views on the Manufacturing Technology Supply Chain and International Trade: Changes in the Global Supply Chain, the International Manufacturing Industry, and the Demand of MT Equipment. To access the full white paper, click here.

PicturePicture
Author
Mario Winterstein
CEO at International Business Development Group Inc.
Recent intelligence News
Rather than alter the origin of imported automobiles and components, the largest impact of the tariffs may have been to inspire more foreign direct investment in the United States.
If you supply automotive, you’re living it. If you don’t, you can count on something changing your business in a profound way.
Data on the auto industry and small and medium-sized manufacturers will shape U.S. manufacturing. Positive trends noted despite economic fluctuations. AMT’s analyst shares findings to help manufacturers plan for the future.
The need for more powerful and efficient vehicles continues to grow as external factors such as population growth, fossil fuel supply, and global warming force change.
Amazon’s new AMR. Rocket factory in-a-box. Advanced additive auto parts. Artificial automation. Record-breaking Goodwood hillclimb.
Similar News
undefined
Technology
By Stephen LaMarca | Mar 22, 2024

High-performance manufacturing. AI chatbot with robotic arm control. Lost & found: Lead in Stanley cups. Common methods for finishing metal parts. ROS development alliance.

6 min
undefined
International
By Arun Mahajan | Mar 19, 2024

India sees another rise in PMI and record export growth. The country's market is poised to skyrocket, particularly in defense and semiconductors, thanks to its surging economy and persistent reforms. For more industry intel and other tidbits, read on.

5 min
undefined
Technology
By Bonnie Gurney | Mar 18, 2024

While additive manufacturing has significantly matured, further development depends on the current market evolving, which will require developing opportunities to showcase it as well as changing how we think of it – that it's more than 3D printing a part.

6 min