Vietnam posts US$530 million of trade surplus in auto accessories in Jan-Apr
A man works at an automotive assembly plant – PHOTO: HUNG LE
HCMC – Vietnam’s imports and exports of auto parts and accessories in the first four months of 2021 were US$1.67 billion and US$2.2 billion, respectively, leading to a trade surplus of some US$530 million.
Data of the General Department of Vietnam Customs showed that the country’s imports of auto parts and accessories from January to April rose 44.8% year-on-year to US$1.67 billion. In April alone, Vietnam imported US$452 million of these products, declining 8% month-on-month.
On the other hand, exports of auto parts and accessories in the first four months reached US$2.2 billion, rising 30% compared with the same period last year. Vietnam’s biggest importers were countries with developed automobile industries such as Japan, the United States, South Korea and Thailand.
The surging exports of auto parts and accessories were better than expected as many automakers in Vietnam have complained that the underdeveloped supporting industries in the country have reduced the competency of locally made autos against imported completely-built-up (CBU) ones.
The local input materials and components for coaches in Vietnam account for only 10-15% of the entire products, while that of Indonesia and Thailand amount to over 70%. According to automakers, the low localization rate has increased the prices of domestically made autos 15-20% higher than that of CBU autos imported from other Southeast Asian countries.
Some market observers said the country’s achievements in the production and export of auto parts and accessories mainly rely on foreign invested companies, especially those from Japan and Taiwan such as Furukawa, Okaya, Nagata, Sanyo Seisakusho, Pronics, Cobal Yamada, MTEX, FAPV, Nissei and Nidec Tosok.
These companies have invested in export processing zones in HCMC such as Tan Thuan and Linh Trung, from where they export their products to other markets around the world.
Vietnam has also attracted manufacturers from Germany and South Korea. For example, Bosch Powertrain Solutions’ factory in the southern province of Dong Nai is producing continuously variable transmission push belts for automakers in the Asia-Pacific and North America.
In 2020, Vietnam imported US$4.2 billion of auto parts and accessories and exported over US$5.6 billion of these products.
Some automakers said the country’s advantages include the high-quality human resources and low labor costs. However, the production of auto parts and accessories still relies on imported raw materials.
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