VietNamNet Bridge – HCM City is calling for foreign investment in the automobile manufacturing industrial cluster located in the city’s Cu Chi outlying district.

An auto production line at Huyndai Thanh Cong Auto Plant in Ninh Binh Province’s Gian Khau Industrial Zone. Former Prime Minister Nguyen Tan Dung recently issued a decision on policies to implement Viet Nam’s automobile industry development through 2025. – Photo: VNA

In October 2014, the city’s People’s Committee approved a project to build the cluster in Cu Chi. Covering an area of nearly 100 hectares, the project has an investment of more than VND500 billion (US$22.43 million).

The cluster was built by Hoa Phu Join-Stock Company, which includes three stakeholders, the Sai Gon Transportation Mechanical Corporation (SAMCO), Sai Gon Construction and Development Join Stock Company (SINVESCO) and the HCM City Infrastructure Investment Join Stock Company (CII).  

According to Hoa Phu Joint Stock Company, the cluster focuses on part supplying for the local automobile industry, including manufacturing automobiles, auto components, and transport equipment.

The investor plays a role in linking foreign and local auto enterprises as well as transferring technology and providing market information and sales for local companies.

The cluster is located in a strategic location as it is next to Provincial Road 8 to the southern provinces of Tay Ninh, Long An, Binh Duong and Dong Nai.

HCM City has 22 industrial clusters with a total area of 1,600 hectares with land rent terms of 50 years.  

Most industrial clusters are located in the city’s western outskirts areas, including Cu Chi and Hoc Mon, which still have more land for developing industrial zones and clusters.

However, many industrial clusters in Cu Chi are not yet 50 per cent full and are still looking for more investors, especially foreign ones.

The industrial cluster badly lacks investors for the rest of its area.     

Nguyen Xuan Dien, SAMCO’s deputy marketing director, said the company now had 40 per cent of stock at this cluster.  

In October 2014, SAMCO and its Japanese partner broke ground on the commercial automobile factory, and opened one year later with a target of making 800 automobiles a year for the domestic market, Dien said.

The company plans to expand its production to other automobile lines to show its potential to attract foreign investors in the cluster.  

However, there are only several factories operating in the cluster, all of which are Vietnamese enterprises, excluding only one Japanese partner of SAMCO.

SAMCO plans to expand its existing factory in the cluster, which will account for one-third or even half of the industrial cluster’s total area.

The Vietnamese automobile market is growing well and the industrial cluster is expected to attract full investment by 2020, according to SAMCO.

Former Prime Minister Nguyen Tan Dung recently issued a decision on policies to implement Viet Nam’s automobile industry development through 2025. The measures include a master plan through 2020.

Among the policies outlined are assistance for credit, demand stimulation and market development.

The part supplying industry for the sector will use advanced technologies and enter partnerships with leading world manufacturers to be eligible to supply spare parts for vehicles made internationally.

By 2020, the automobile part supplying industry is expected to be able to meet about 35 per cent of the demand for domestic spare parts and accessories.

It should also be able to satisfy more than 65 per cent of local needs between 2026 and 2035.

The plan also targets the export of about 90,000 made-in-Viet Nam cars by 2035, encouraging the production of environmentally friendly vehicles.

Meanwhile, technology will be upgraded to make products meet international standards.

The strategy underscores the need to boost linkages and co-operation among automakers and assemblers, enterprises engaging in support industry and research and training centres in all economic sectors.

VNS