Vietnamese Trade Offices abroad urged to promote mechanical product exports

Representatives from localities across the country and Vietnamese Trade Offices abroad attended the workshop online and in person.

Speaking at the event, Director of the ministry’s Vietnam Trade Promotion Agency (Vietrade) Vu Ba Phu said that mechanical engineering is one of the industries that plays a driving role in the growth of the national economy.

Recently, the mechanical industry has experienced remarkable growth, increasing the localisation rate, creating a driving force for industrial and economic development, and millions of jobs.

According to the MoIT, the industry has space to thrive but mechanical enterprises still find it difficult to diversify and expand the markets because their competitive capacity and branding development are not strong enough to reach potential customers.

Therefore, the Government and the Prime Minister have urgently directed ministries, sectors, and localities to implement solutions to remove difficulties and boost the growth of the industry.

Nguyen Chi Sang, vice president and general secretary of the Vietnam Association of Mechanical Industry (VAMI), said that although the mechanical industry's import and export are large, they are mostly from foreign-invested enterprises.

He said foreign customers see limitations of Vietnamese mechanical enterprises, for example, modest skills in searching for consumers, no traditional products, and limitations in using e-commerce for production and business.

Moreover, Vietnamese enterprises mostly compete with cheap labour, rely on material sources from China, and have not mastered the provisions in commercial laws of markets such as the EU, the US, and Africa.

The association called on Vietnamese trade offices in foreign markets to support domestic mechanical enterprises, especially in providing market information. At the same time, the MoIT needs to support domestic businesses in connecting with foreign buyers, and participating in e-commerce channels.

According to Truong Thi Chi Binh, vice president and general secretary of the Vietnam Association for Supporting Industries (VASI), enterprises saw the number of orders decreasing by 20% and some even suffered a 40% fall in their orders. However, the mechanical sector has new customers due to the shift in production.

She said the capacity of domestic enterprises has seen positive changes, particularly in the production stage. Vietnamese enterprises are capable of competing with Chinese and Indian companies in this regard.

Ta Duc Minh, Vietnamese Trade Counselor in Japan, said that Japan is implementing a new policy to avoid supply dependence on China and expanding its imports from ASEAN countries, including Vietnam.

On the other hand, Japanese mechanical enterprises are mainly small and medium-sized and long-standing. The owners of the enterprises find it difficult to transfer the production because of the country’s aging population. So, they are looking to Vietnam for production cooperation opportunities, he said.

However, the mechanical engineering industry in Vietnam is still dependent on imported raw materials, he said, adding that domestic mechanical enterprises need to invest more in research and product development to participate further in the global supply chain.