To develop, the mechanical industry must renovate its management

What do you think about the level of mechanical technology and equipment of Vietnam?

Now, the level of mechanical technology, equipment for production of Vietnam is too backward compared to the rest of the world. Basically, the domestic mechanical enterprises of many economic sectors are still organizing production at the level of industry 2.0, which is the technology and production management that industrialized countries in the world have ignored, because it is divided and not connected to each other. There are only a few Vietnamese mechanical companies that have reached the level of industry 3.0. This caused the Vietnamese mechanical industry to lose at “home” when competing with competitors with modern mechanical industrial technology. This is a very sad reality.

In your opinion, what is the reason for the backward technology in the mechanical industry in Vietnam?

The reason that makes the Vietnamese mechanical industry lag after nearly 20 years of development, from 2000-2018, is partly due to the responsibility of both state management and the domestic enterprises.

Specifically, the system of policies and state management for domestic mechanical production is not effective, does not match the reality, does not protect the domestic market, losing many orders to foreign countries and allowing FDI enterprises to expand right in the Vietnamese market as well as in the region. Meanwhile, Vietnamese mechanical companies spontaneously invested; a weak market research and technology management leads to mechanical products of Vietnam finding it difficult to compete with other countries. Mechanical products are mainly processed steel construction, few products with high added value.

Mechanical production is the same as the production in other technical fields, the market is the most important factor. Over the past years, though Vietnam has a large capacity, these weaknesses make the domestic mechanical enterprises unable to compete and exploit. For example, manufacturing and assembling automobiles, shipbuilding, river-coast ships, offshore fishing vessels, agricultural mechanization machines, oil and gas industry, energy system development, transportation, construction... of Vietnam is very large but the market is almost manipulated and dominated by foreign companies.

In order to change the situation, grow up in the coming years, what is the feasible solution for the mechanical industry of Vietnam, sir?

In the coming time, the strategy for the Vietnamese mechanical industry’s development should be based on the study of calculations and selection of a number of mechanical products on the domestic market, which can compete with the foreign products to add to the key products list. It is buses and trucks production and assembly; manufacture of non-standard equipment and steel structures for new industrial construction works; manufacture of anti-salvage equipment, environmental protection treatment, green energy production and some products of the defense industry.

Moreover, in order to protect the domestic mechanical market, Vietnam needs to learn the lessons from other industrialized countries for protecting their domestic markets. That is, the Government should build a comprehensive policy system, minimize the import of technology, machinery and equipment from other countries which are outdated and backward, causing energy consumption and environmental pollution in Vietnam. Not doing this well, the domestic mechanical industry will never be able to grow in the coming years.

In addition to the above solutions, in the current situation of international economic integration, aiming to quickly create momentum for the mechanical industry, what does the VAMI propose to the Government?

In order to build and protect the domestic mechanical market as well as protect the domestic market in the context of Vietnam's expanding international economic integration, the VAMI recommends that the Government should soon issue some policies. Specifically, the Government needs to renovate the management of the mechanical industry nationwide, to establish a body to help the Government unify management and allocation of resources for investment in mechanical development in Vietnam; to study countries with technical barriers and policies to encourage production without violating free trade agreements.

In addition, the Government should issue a policy to minimize the import of technology and equipment which is backward in mechanical production as other countries have been doing during the period of free trade; renovate science and technology policies, investment plans, finance, banking, training of human resources for the mechanical industry; quickly legislate on activities of associations and branches so that the associations have the legal basis to consult and review and propose the Government to promulgate appropriate policies in each period.

Thank you, Sir!