VietNamNet Bridge - Thaco, a 100 percent Vietnamese automobile manufacturer, has begun exporting spare bus parts to Russia, but experts have warned that it will have to compete with Chinese enterprises.

Thaco’s CEO Tran Ba Duong confirmed that his enterprise now exports auto spare parts and mechanical components.

In November Thaco exported three sets of spare bus parts to Russia. If the products are accepted, Thaco will ship the first consignment of 300 sets of bus parts to Russia. They will be used in vehicles for the World Cup 2018.

Do Van Dung, rector of the HCM City University of Technical Education, said that Vietnam has great advantages in labor costs and materials, along with competitive prices.

Dung said that Truong Hai has been increasing the locally made content proportion in automobile products for many years. The manufacturer now can make nearly all the components inside a bus.

Vietnamese workers have good skills and are meticulous, especially in making seats and components.

“We still cannot export iron frames for automobile assembling. However, Thaco began making bus seats and plastic parts a long time ago,” he said.

“Thaco, together with SAMCO in HCM City, has been a pioneer in making spare bus parts for export,” he said.

He said that Vietnamese workers have good skills and are meticulous, especially in making seats and components.

The local plastics industry has been developing well. There are thousands of plastic accessories in a bus, and local enterprises can make them thanks to molding technology with CNC machines. Plastic particles can also be made at Vietnamese plants.

The localization ratio at Thaco is about 40 percent on average, while the ratio is higher for buses, about 60 percent. 

Thaco once faced difficulties in production because of a lack of capital. However, its sales surpassed Toyota in the last few years after a Singaporean investor poured money into the enterprise.

Trinh Minh Hoang, a lecturer at the Hanoi University of Technology, noted, however, that exported components are simple products with low complexity. Vietnam’s support industries are still weak because of the lack of reasonable policies to encourage investments.

He warned that when trying to boost exports to Russia and other markets, Vietnam will have to compete with China, which has a well-developed automobile industry with tens of thousands of enterprises.

Thaco, a 100 percent Vietnamese owned automobile company, witnessed  a two-fold increase in revenue in 2015 compared to 2014. The manufacturer had VND41.432 trillion in revenue and post-tax profit of VND7.037 trillion.

Kim Chi