tailieunhanh - Chapter 6: Development of automotive industries in vietnam with improving the network capability

Chapter 6: Development of automotive industries in vietnam with improving the network capability. This survey focuses on the automotive industry, especially its manufacturing network and technological capabilities. The research will also identify the internal and external factors of motivation and hindering, and that firms need to implement regular innovation and upgrading. | Chapter 6 Development of Automotive Industries in Vietnam with Improving the Network Capability Truong Thi Chi Binh Institute for Industry Policy and Strategy Nguyen Manh Linh Institute for Industry Policy and Strategy June 2011 This chapter should be cited as Truong T C. B. and M. L. Nguyen 2011 Development of Automotive Industries in Vietnam with Improving the Network Capability in Intarakumnerd P ed. How to Enhance Innovation Capability with Internal and External Sources. ERIA Research Project Report 2010-9 Jakarta ERIA . Chapter 6 Development of Automotive Industries in Vietnam with Improving the Network Capability Truong Thi Chi Binh Nguyen Manh Linh Institute for Industry Policy and Strategy As a latecomer the automobile industry started in Vietnamjust 20years ago. Although the country has made great efforts to promote the industry the production scale is relatively small with only 5 000-7 000 units per year by introducing backward and simple production painting and welding technologies. The localization rate of the automobile industry remains low currently only reaching about 5-10 .More than 90 of automobile parts and components are imported from parent companies or foreign suppliers. While bulky seats and some labor-intensive parts have been localized the most valuable parts are imported. Compared with the motorcycle industry the market size of the automobile industry in Vietnam is smaller and the growth rate is lower which limits the strategic options to overcome obstacles. Trucks and buses have a higher localization rate than passenger cars since local firms can supply parts for passenger cabins and storage cabins. The linkage of local businesses to large manufacturers is very limited. Although MNCs in the automotive sector entered the Vietnam market nearly two decades ago most of the important parts still are imported from other branches of parent companies or from foreign suppliers. This report seeks to understand the innovative activities .