Economist Dinh The Hien said state-owned corporations involved in key sectors of the economy want to participate in all stages of their production chain, instead of ordering spare parts for their products from private small-and medium-sized enterprises components. “It is one of reasons hindering the development of the local supporting industries.”While local enterprises could not participate in supporting industries due to weak technology and limited capital capacity, and shortage of support from the government, foreign ones are not interested in it because of the small market scale.A representative of a foreign car assembler in Vietnam said Vietnam has a very high number of assemblers (18) compared to the industry size (less than 200,000 units). “With multiple models assembled in all factories the average production run is less than 3,000 units a year,” he said.“At this volume it is almost impossible to localize beyond a very basic level. Most component manufacturers require annual production runs of at least 100,000 units a year, and this will require exports if they are to set up in Vietnam,” he said.
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