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.

Recent intelligence News
The Mexican car market is equally as large as it is varied. Forty-two different makers have representation in the market, having produced over 400 models, making Mexico one of the most diverse automobile markets in the world.
According to the International Energy Agency (IEA), about 3 million new electric cars were registered in 2020. For the first time, Europe beat out China with 1.4 million new registrations. China had 1.2 million, and the United States had 295,000.
Despite the challenges raised by COVID-19, South Korea's excellent human capital, adoption of high-value manufacturing, and exceptional ports are well positioned to stabilize the industry and allow the country to maintain a prominent position in the ...
According to IHS Markit, the Italian automotive industry will recover much faster than other sectors of Italy’s economy, which can be demonstrated by the fact that Italy will reach pre-COVID-19 growth in manufacturing as early as 2022. 
The message to car manufacturers and energy suppliers is to grab this opportunity to invest in the necessary infrastructure to support electric vehicles, as the number of drivers using such cars is expected to rise significantly.
Similar News
By Peter R. Eelman | Jan 18, 2022

We sincerely wish you a year filled with happiness, health, and prosperity! While we don't feature content to enhance your personal happiness, every even-numbered year we host the Western hemisphere's largest manufacturing technology event, IMTS ...

5 min
By Amber Thomas | Jan 17, 2022

Last week, the U.S. Supreme Court decided that OSHA has no legal authority to enforce the Biden administration’s vaccine order for private businesses with 100 or more employees. Earlier this month, the 6th U.S. Circuit Court of Appeals upheld the stay ...

4 min
By Greg Jones | Dec 13, 2021

The impact of the disruption in the supply chain across nearly all industries shows up in shortages and even empty shelves of the day-to-day consumer products that we use and that add convenience to our lives. These supply chain challenges exacerbate...

10 min