Current situation of development of Vietnam's mechanical industry

More than 60 years ago, in 1958, Hanoi Mechanical Factory (Factory manufacturing machine tools No. 1), now Hanoi Mechanical One-member Limited Liability Company was born, marking a milestone. important in the history of the development of the mechanical engineering industry in Vietnam.

The period 1960 - 1970 is considered as the golden age of the mechanical industry, our country used to have a cluster of leading mechanical factories, such as Factory No. 1 (machine tool manufacturing and machine tool manufacturing). complete equipment), Tran Hung Dao Mechanical Factory (producing small engines), Song Cong Diezel Factory, Thai Nguyen Iron and Steel Complex ... with a higher level of development or equivalent to other countries. in the area. Into the renovation period, the mechanical manufacturing industry has made positive efforts and continuously develops, gradually becoming an important industry, promoting other economic sectors to develop together, produce many types products serving all industries of agriculture - forestry - fishery, industry, services, tourism as well as serving domestic demand and initially reaching foreign markets.

After 30 years of renovation, Vietnam's mechanical engineering industry has made important progress. Many businesses and mechanical manufacturing sectors have made breakthrough development steps. The mechanical production capacity of the economy has been strengthened with a number of pioneering enterprises, such as Military Industry - Telecommunication Corporation, Truong Hai Auto Joint Stock Company, Manufacturing Limited Liability Company and trading Vinfast, Vietnam Engine and Agricultural Machinery Corporation, Industrial Machinery and Equipment Corporation, Construction Mechanical and Electrical Corporation, ... However, in this period, there were also many mechanical enterprises. Vietnam's gas manufacturing gradually lags behind, even losing heavy losses like Vinashin, facing many difficulties like Gia Lam Railway Engineering Joint Stock Company (formerly Gia Lam Railway Factory).

In recent years, with the attention and support of the Government, the mechanical engineering industry has made new developments, achieving some positive results. Currently, Vietnam's mechanical engineering industry has the strength concentrated in three sub-sectors including motorcycles and motorcycle spare parts, household mechanics and tools, cars and auto parts. These three sub-sectors currently account for nearly 70% of the total industrial production value of the country's mechanical engineering.

Data of the General Statistics Office shows that the number of mechanical enterprises has increased rapidly, from about 10 thousand enterprises (in 2010) to more than 21 thousand enterprises (in 2016). By the end of 2017, the number of mechanical engineering enterprises operating and having business results was over 25,000 enterprises, accounting for nearly 30% of the total number of manufacturing and processing enterprises; creating jobs for over 1 million workers, accounting for nearly 16% of the total number of employees in manufacturing enterprises (Vietnam Statistical Yearbook 2018).

In the country, there is a system of mechanical factories of all sizes, large and small. In a number of localities, the economic region has developed the model of industry clusters in the mechanical engineering industry (such as Chu Lai mechanical complex - Quang Nam ...). In addition, the mechanical engineering industry has also formed a number of businesses with regional development potentials.

In particular, in some areas, there have been changes and breakthroughs such as: Manufacturing hydroelectricity equipment (providing for large and small hydroelectric plants in the country), manufacturing oil rigs. gas (supplying oil and gas exploration and exploitation drilling to 120m depth, 90m water self-lifting rig, oil well drilling rig), electrical equipment, manufacturing and supplying equipment for cement plants, shipbuilding of all kinds (oil tankers with a tonnage of 105,000 DWT, liquefied gas tankers with a tonnage of 5,000 tons, bulk carriers ...), complete equipment works (sugar factory with a capacity of 1,000 tons of sugarcane / processing rubber latex with capacity of 6,000 tons / year).

Domestic mechanics have also produced and assembled almost all types of cars, trucks and passenger cars; motorbike production alone has localized rate of 85-95%, meeting domestic and export demand. A number of research and design agencies and mechanical manufacturing enterprises have step by step renovated and improved their consulting, designing, manufacturing equipment and technology capabilities, participating in the implementation of a number of bidding packages. national key project.

However, with the development of more than 60 years of Vietnam's mechanical engineering industry, in addition to the results achieved, there are still many shortcomings and shortcomings, expressed through the specific aspects:

Vietnamese mechanical products have very few domestic brands. The popular domestic mechanical enterprises are small-scale, have low competitiveness, have not mastered complete core technology. The level of mechanical engineering (which is the mainstay of industrial production), especially precision engineering, is still outdated compared to many countries 2-3 generations. Research and product development are largely dependent on foreign firms. Market expansion is still facing many difficulties due to the lack of market information and the insufficient competitiveness of domestic enterprises. According to the assessment, the mechanical engineering industry only meets more than 32% of the domestic mechanical product demand. In addition, it is difficult for domestic mechanical manufacturing enterprises to become subcontractors supplying machinery and equipment for large investment projects implemented in the past period (thermal power, steel, chemical industries. , transport infrastructure) ... Moreover, free trade commitments also put pressure on domestic enterprises when tariff barriers to protect domestic production are removed.

Regarding the science and technology level, Vietnam's mechanical engineering industry has very few inventions and patents registered, equipment and technology level of the whole industry is slow to innovate. The mechanical enterprises lack output for products, so they do not have the opportunity to accumulate and invest in technological innovation. The industrial revolution 4.0 took place, new technologies have completely changed the way and methods of production today, placing urgent requirements in innovation and updating technology trends for businesses. mechanical industry. Meanwhile, the ability of Vietnamese enterprises to participate in the mechanical value chain is still very limited. According to the Vietnam Chamber of Commerce and Industry (VCCI), only about 40% of Vietnamese enterprises can participate in the global supply chain. Most of the domestic supporting industries are only tier 3 and 4 suppliers to FDI enterprises in Vietnam. Supplying products are mainly simple components and materials with low value (packaging, simple details ...).

By the end of 2017, although the ratio of the number of enterprises operating in the mechanical engineering industry to the total number of enterprises in the manufacturing and processing industry was quite high (nearly 30%), the ratio of net revenue Business export of mechanical enterprises compared to the whole processing and manufacturing industry is quite low and tends to decrease over the years. This shows that the investment efficiency of the entire mechanical engineering industry in general is not high, not showing the role as a foundation for industrial development. Important mechanical sub-sectors such as: Complete equipment, driving machines, mechanics for agriculture-forestry-fishery and processing industry, machine tools, construction engineering, shipbuilding engineering, Electrical engineering - electronics and automotive engineering - transport engineering achieved low results compared with the development strategy of the mechanical engineering industry.

Besides, most of the raw and auxiliary materials for the mechanical industry are mainly iron and steel and non-ferrous alloys that cannot be produced domestically, so they must be imported. The industry's human resources are insufficient and weak in both quantity and quality. The number of highly skilled mechanics has decreased, and professional workers lack international vocational certificates and foreign language skills. The research and development force, first of all, the design consultant team has not yet reached the level, meeting the requirements of works, projects on synchronous mechanical equipment ...

According to experts, the reason for the above shortcomings and shortcomings is that most of the domestic mechanical enterprises have small production scale, medium technology level, and have not yet confirmed their capacity. market force. Some foreign firms have strong brands, but in Vietnam they are mainly assembled for local consumption; The level of association and cooperation is still low, unable to bring into play the strength of production assignment and cooperation; Fixed capital for mechanical production is often large, working loan cycle is low, so it is difficult for mechanical enterprises to mobilize capital, mechanical projects are therefore less attractive to commercial banks. than projects in other sectors.

The overlap in management also limits the development of the mechanical engineering industry, the monopoly of technology and equipment limits the assignment of specialization, and slow technical and technological innovation in mechanical manufacturing. gas, uneven product quality, high production costs.

In addition, the development of standards and techniques of the industry has not been given adequate attention, lack of synchronization with the support of the operation of accrediting agencies according to registered standards and regulations ...

Orient to build mechanisms and policies to remove difficulties and create a driving force for development

By 2035, Vietnam's mechanical engineering industry aims to develop a step-by-step modern mechanical industry, serving as a foundation for other industrial manufacturing - services. Accordingly, developing with the majority of majors with advanced technology, product quality meeting international standards, participating more deeply in the global value chain, using energy economically, efficiently, and fair competition in international integration; a contingent of professional, disciplined and highly productive workers who are proactive in the stages of researching, designing and manufacturing mechanical products, basically meeting the demand for mechanical products in the domestic market. Experts say that, to realize this goal, it requires the efforts of all businesses, associations, experts and scientists. In particular, it is necessary to have the more drastic participation of the State, the Government, ministries, branches and localities in perfecting mechanisms and policies with more incentives and incentives for mechanical enterprises to create a favorable environment to mobilize resources for the development of Vietnam's mechanical industry in the coming time.

Recently, at the Conference on solutions to promote the development of the Vietnamese mechanical industry (held in September 2019 - in Hanoi), Prime Minister Nguyen Xuan Phuc affirmed that in the coming time, the Mechanisms, mechanisms and policies are synchronous and strong enough, especially localization policies, to develop the mechanical industry according to the Strategy on the development of the mechanical engineering industry to 2025 and a vision to 2035. Accordingly, Thu The general requested that the promulgation of mechanisms and policies in the coming time should aim at creating a market for mechanical engineering businesses, in which the State plays the role of "supporter" for businesses, promoting staff. mechanical enterprise. Relevant ministries and branches step by step study and develop policies to support domestic enterprises to participate more in domestic projects and projects. To study and promulgate bidding regulations to increase the use of domestically produced materials and goods in order to create a market for domestic enterprises to develop in accordance with current regulations and international practices.

In addition, according to experts, with nearly 100 million people, the market size of the mechanical manufacturing industry in Vietnam in the period 2019-2030 is forecast at around 310 billion USD. This will be a large, promising market with good prospects for the development of the domestic mechanical industry, so mechanical enterprises need to take advantage of this potential and opportunities. Mechanical and manufacturing enterprises need to renew their thinking more strongly, build a philosophy and business foundation in line with the development trend of the digital economy; Promote joint ventures, association in production, dominate the market, unite to join forces, with new directions to create opportunities for Vietnamese mechanical enterprises to participate in the global production value chain.

Mechanical enterprises need to continue to rise to master science - new technology, capital and market, because these are the three decisive factors for their success. To step up training to improve the quality of human resources for the industry. To create and link the linkage between the State, enterprises, scientists and the market, in which the market is the center; Branding; implementing communication activities, advertising for products of the mechanical industry ...

Improve the quality of trade promotion activities, attract investment from major mechanical enterprises in the world to gradually form a domestic supply chain and seek to expand export markets for mechanical enterprises in the world. country. Implement business connection programs to strengthen links and joint ventures between domestic enterprises and with major enterprises in the world in the value chain to access technology and standardize products.

In addition, the mechanical engineering industry needs to continue building and developing a system of management, assessment and national technical certification, especially for vocational skills in the mechanical field, to meet the demand of Import and development of the Industry.