FiinGroup joined as Speaker at Global TransporTech 2019 in Korea
Incheon, October 16th, 2019: Mr. Le Xuan Dong, Head of Market Research at FiinGroup, spoke at Global TransporTech (GTT) 2019 in Incheon, Korea. He shared in-depth insights on Vietnam auto part market potential, market trends and recommendations on how Korean auto part suppliers may cooperate with Vietnamese auto and auto part companies and enter the promising market efficiently.
Global TransporTech (GTT) 2019 was held by the Korea Trade-Investment Promotion Agency (KOTRA) in Songdo Convensia, Incheon, South Korea on Oct 16th - 17th, 2019. GTT, the Korea’s most prominent automobile event, aims to facilitate constructive interaction between Korean and foreign automobile companies and to further reinforce prominent Korean companies to enter global value chains.
There are 300+ foreign buyers and 250+ Korean auto part manufacturers participating in the event. KOTRA invited the representatives from emerging and developed automotive markets including Vietnam, Pakistan, India, China and US to share the sector insights, local market potential and prominent trends such as future cars (EV, HEV, autonomous driving etc.).
All delegates, Korean and foreign auto part companies, expressed their strong interests in promising opportunities in Vietnam automotive market. The event is followed by a series of business and trade promotion activities, 1:1 business meetings.
Mr. Dong, Head of Market Research, shared current situation, market potential and key development trends in Vietnam auto and auto part sectors. In addition, leveraging on FiinGroup’s comprehensive database and in-depth industry expertise of automotive sector, he also discussed the collaboration opportunities with domestic players (i.e. both local car manufacturers and local auto part makers) as well as recommendations on how Korean auto part suppliers may enter the market efficiently.
Picture: FiinGroup joined as Speaker at Global TransporTech 2019 in Korea on Oct 16th - 17th, 2019
Rising demand for automotive in Vietnam
Vietnam automotive market is still in early stage of development with annual sales volume of approx. 340,000 cars. The market is very promising as it enjoys a healthy annualized growth rate of 18% during 2014 - 2018 and is expected to continue around 20% y-o-y growth in the next 5 years.
The market key growth drivers come from low car penetration rate, golden population structure and rising disposal income. The car ownership in Vietnam in 2018 is around 29 cars per 1,000 people, the lowest one compared to other neighbouring countries in ASEAN (such as for Philippines, the corresponding figure is 99 cars per 1,000 population, Singapore 171, Indonesia 499, Thailand 548, Malaysia 897). Viet Nam has a growing educated workforce and is now in a period of golden population structure, where 45% population are under 30 years old. Per capita GDP in Dec 2018 is 2,587 USD and expected to grow at 6%-8% per year. Thus, the car demand is expected to keep growing in the time to come.
Domestic car manufacturers’ ambition to boost localization rate
In light with Vietnamese Government’s supporting policies and incentives, all domestic car manufacturers including FDI and local players are open to collaborate with auto part suppliers, aiming to increase their localization rate to at least 40 per cent via further development of local supplier base to lower their production cost as well as to export to ASEAN countries to enjoy tax incentives under ASEAN Trade in Goods Agreement (ATIGA).
Figure 3: Localization rate of top OEMs in Vietnam, 2019
Potential partnership opportunities with local auto part suppliers
The local auto part suppliers are also open to cooperate with foreign auto part suppliers, including Korean ones, to improve their production and R&D capabilities to produce more high-end products to serve not only local car manufacturers but also join the global supply chain
You can download our presentation in the following link: Vietnam Auto Part Industry: Ready for a breakthrough from FiinGroup JSC
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