Challenges and prospects of Vietnamese mechanics

Role and current situation

Considered the “backbone” of the industry, because it not only creates machinery and equipment but also promotes production in other industries such as automobiles, electronics, construction and agriculture, the Vietnamese mechanical engineering industry currently contributes about 16-17% of the country's GDP, while providing jobs for millions of workers.

In recent years, with the support of the government through preferential policies, along with the participation of many foreign investors, the Vietnamese mechanical industry has achieved some significant progress. Some mechanical enterprises have begun to shift from simple assembly and processing to the production of products with higher technology content. In particular, the development of precision mechanical equipment, automated machinery, and components for key industries such as automobiles, aviation, and renewable energy is being promoted.

Big challenges in the mechanical industry

Despite its development, the Vietnamese mechanical industry still faces many major challenges. One of the main difficulties is the low level of technology and labor productivity. Many domestic mechanical enterprises mainly focus on simple processing and assembly instead of developing products with high added value. This leads to a high dependence on imported technology and raw materials.

The supporting industry in the mechanical engineering sector in Vietnam has not yet developed strongly, making the domestic supply chain incomplete. The shortage of domestic raw materials and components forces businesses to import from abroad, increasing production costs and reducing the competitiveness of Vietnamese mechanical products.

Furthermore, the research and development (R&D) capacity in the Vietnamese mechanical industry is still limited. Many enterprises do not have enough resources or do not pay attention to investing in R&D, which reduces the ability to innovate and develop new technologies, affecting competitiveness in the international market.

Development solutions

For sustainable development, the Vietnamese mechanical industry needs to continue implementing many synchronous solutions:

Investing in technology and improving product quality: Mechanical enterprises need to focus on investing in modern production technology such as automation, robots, and artificial intelligence. This not only helps increase productivity but also improves product quality, meeting international standards.

Developing supporting industries: Vietnam’s mechanical engineering industry needs to build a strong domestic supply chain to reduce its dependence on imported raw materials and components from abroad. This can be done through cooperation with international businesses or calling for investment in the supporting industry sector.

Strengthening human resource training: High-quality human resources are an important factor in improving production capacity and innovation. Therefore, investment in training qualified workers, engineers, and mechanical experts is necessary. Intensive training programs in new technology, production management, and product development should be promoted.

Strengthening research and development (R&D): Investing in R&D helps mechanical enterprises improve their innovation capacity, develop products with higher added value, and improve their competitiveness. The government also needs to have policies to support R&D in the mechanical industry, thereby encouraging enterprises to invest in this field.

International cooperation: Vietnamese mechanical enterprises need to continue to seek cooperation opportunities with international partners to learn from experience, transfer technology, and expand markets. Participating in the global supply chain also helps enterprises improve production capacity and increase competitiveness.

Future prospects

With efforts to improve and support from the government, the Vietnamese mechanical industry has many opportunities to develop strongly in the coming time. In particular, free trade agreements (FTAs) such as EVFTA and CPTPP have opened up great opportunities for Vietnamese mechanical enterprises to access international markets.

However, to truly develop sustainably, the Vietnamese mechanical engineering industry needs to continue to promote technological innovation, invest in R&D and strengthen international cooperation. Only then can the mechanical engineering industry make greater contributions to the country's industrial and economic development in the future.