“If we only assemble, Vietnam will never have a complete automotive industry. The global shift toward electric vehicles is opening a golden window of opportunity for us to take real ownership,” automotive expert Vo Quang Hue shared.
Three decades on, Vietnam’s automotive industry still faces a difficult question: have we truly built an industry in the full sense of the word? It is not merely a retrospective inquiry, but one that compels strategic choices for the future, as the global automotive sector enters an unprecedented transformation cycle.
Looking back over 30 years, Vietnam has a population of more than 100 million and a workforce widely recognized for its intelligence and adaptability. Yet to this day, the country has not produced a car in the way South Korea or Japan once did when they laid the foundations of their national automotive industries.
Within the region, Thailand has become the manufacturing hub of Southeast Asia. Indonesia has emerged as the second-largest assembly center in the region. Meanwhile, Vietnam continues to spend billions of US dollars each year importing completely built units and components. Has the country taken a wrong turn?
On the occasion of the Lunar New Year 2026, VietNamNet presents a special conversation on the theme “Mastering the automotive industry” with Vo Quang Hue, one of Vietnam’s most distinguished automotive engineers. He is among the few Vietnamese professionals with 24 years of experience at BMW Group, former General Director of Bosch Vietnam, former Deputy CEO of Vingroup and currently Honorary Chairman of the Society of Automotive Engineers Ho Chi Minh City.
Thirty years in review, and a candid assessment
Vo Quang Hue during the talks with VietNamNet reporter. Photo: Nguyen Hue
Drawing on decades of experience in the global automotive sector, Hue offers a frank assessment: Vietnam still does not have a genuine automotive industry. The presence of foreign manufacturers has enabled the country to develop assembly capacity, but core decisions on product design, technology and development cycles remain in the hands of parent corporations abroad.
“We have not yet built a strong research and development base for automotive technology, nor a sufficiently robust supporting industry capable of supplying multiple global manufacturers,” he said. As a result, localization rates remain low. The supporting industry struggles to grow, and the market is trapped in a familiar cycle: small volumes - high costs - weak competitiveness.
At the same time, Hue acknowledged the foundations that have been laid. A generation of skilled workers and engineers has matured through joint ventures. Thaco has made limited efforts to export trucks. Most notably, VinFast has entered the electric vehicle segment. For the first time, Vietnam has a company that controls decisions from R&D and product strategy to technology roadmaps. That, he suggested, offers a glimpse of a different path beyond simple assembly.
From a policy perspective, the program’s host pointed out that Vietnam has not lacked strategies, decrees or tax incentives. What it has lacked is an effective mechanism to bind localization and technology transfer commitments to investors. Targets have existed largely on paper without generating sufficient pressure to build a substantive supporting ecosystem.
Vo Quang Hue responded directly: “If you assemble in small quantities within a small domestic market and only serve local demand, you can never achieve sufficient scale for each model or component to localize and compete on price and quality. This is the trap we have fallen into for decades: setting ambitious targets that are not feasible in practice. The mindset, the approach and the way policies are implemented must be fundamentally different.”
Technology and supporting industry as twin pillars
Automobile production at Thaco’s Mazda plant. Photo: Nguyen Hue
Discussing the development strategy for 2030 to 2045, Hue argued that market size, while important, cannot substitute for a strategic focus on core technologies.
“To speak of mastering the automotive industry, we must master design, research and development, and gradually gain control of core technologies,” he emphasized. In his view, two decisive pillars are a technology development strategy and a supporting industry development strategy. Pursuing sales volume alone may expand the market but will not build sustainable industrial capacity.
He stressed that the global transition to electric vehicles presents a rare golden opportunity. After more than a century of evolution from purely mechanical systems to electronics and software, the global automotive supply chain is undergoing profound restructuring, gradually moving away from internal combustion engines. This window will not remain open indefinitely. Without a change in approach, future objectives may remain aspirational rather than attainable.
Vo Quang Hue, who spent 24 years at BMW and served as Deputy CEO of Vingroup, now Honorary Chairman of SAE Ho Chi Minh City. Photo: Nguyen Hue
If electric vehicles are chosen as the strategic direction, Vietnam should concentrate on key technologies such as batteries, electric motors, powertrain systems and especially software, advanced driver assistance systems and autonomous driving. These are areas where Vietnam has human resource advantages and could integrate more deeply into the global value chain. The emergence of domestic technology firms developing automotive software signals the possibility of moving into the industry’s core rather than remaining at its final assembly stage.
Vo Quang Hue repeatedly underscored the importance of research and development in Vietnam’s automotive industry, along with a concrete roadmap for meaningful localization.
“If we define localization merely as the percentage of domestic component value in the total vehicle cost, that does not necessarily mean we have mastered the technology,” he noted.
“We need change. We need concrete policies and alignment among automakers, especially Vietnamese enterprises, if we are to achieve this crucial transformation for the country.”
In 2025, VietNamNet reported that the Ministry of Industry and Trade is drafting a new automotive development strategy to 2030 with a vision to 2045, replacing the current one. The draft sets targets of annual domestic sales of 1 to 1.1 million vehicles by 2030, with domestic production accounting for 60 to 70 percent. By 2045, total vehicle numbers are projected to exceed 5 million, with domestic production reaching around 80 percent. The supporting industry is expected to supply about 60 percent of component value and manufacture major assemblies such as gearboxes and drivetrain systems.
Three decades have revealed the limits of an assembly-based path. The road ahead, as articulated in this dialogue, demands a more decisive choice: either remain on the margins of the global value chain, or step into the industry’s core through technology, knowledge and genuine mastery.
Vo Quang Hue, born in 1952, is a leading expert in automotive engineering. After graduating in Germany, he spent 24 years working for BMW Group. Following more than 12 years at BMW’s R&D center in Munich, he was responsible for establishing subsidiaries and production facilities and overseeing BMW’s business operations in Southeast Asia, Mexico and Egypt.
After leaving BMW, he became the first General Director of Bosch Vietnam from 2007 to 2017. Between 2017 and 2020, he served as Deputy CEO of Vingroup in charge of the VinFast project.
He is currently Honorary Chairman of the Society of Automotive Engineers Ho Chi Minh City, Chairman of Foundry AI Vietnam, and a member of the University Council of the Vietnam-Germany University. He also serves as a senior advisor to several organizations, corporations and startups in Vietnam.
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