Vinh Phuc has emerged as one of the key automobile and motorbike production centers in the northern economic region of Vietnam

Potential

In the first eight months of 2023, the amount of FDI and DDI capital in Vinh Phuc province increased significantly over the same period of 2022, specifically US$445.53 million of FDI fund (up 75%) and VND11,645 billion of DDI capital (up 44.9%). To attract an additional US$2-2.5 billion of FDI capital and VND20,000-25,000 billion of DDI capital, Vinh Phuc successfully organized investment promotion events in key markets such as Japan, South Korea, and the United States with many working sessions with major companies, investment funds and trade promotion agencies such as Gibson, Dunn & Crutcher Law Firm, New York Stock Exchange and Google and many other promotion activities aimed to seek directions for tourism development, urban construction, electronics, automobile, motorbike, high-tech and supporting industries.

To woo more investors, Vinh Phuc province successfully hosted an investment promotion event with Vietnamese and Japanese strategic investors. The province welcomed and worked with many delegations and investors from foreign countries and territories that visited and explored the province’s business environment.

Most recently, Vinh Phuc successfully attracted a US$30 million engine production investment project from Polaris Group of the United States, one of Top 500 largest US companies, which mainly assembles motorbike, automobile and vehicle engines. The project is located in Ba Thien II Industrial Park (Binh Xuyen district), becoming the group’s second factory in Vinh Phuc and the 20th factory worldwide.

Previously, Polaris Group launched its first factory in Vinh Phuc with Northstar Precision Vietnam Co., Ltd in Khai Quang Industrial Park. This showed that the group truly trusted and expected that Vinh Phuc would be the land that opened up new opportunities for it. Once the factory starts official operation, the firm will assemble large displacement motorbikes with an initial revenue of US$100 million a year, which will reach US$500 million by 2030. Vice President of Polaris Group Dalton Pierce said: Within just one week, Polaris project in Ba Thien II Industrial Park (Binh Xuyen) was appraised, approved and granted the investment registration certificate by the province.

 Secretary of the Provincial Party Committee Hoang Thi Thuy Lan emphasized that Vinh Phuc always values the interests of businesses and sees them as long-term reliable partners and service recipients. So, the province always gives investors friendly sentiments and facilitates them to make investments and do successful business. The advent of large motorbike investors from the U.S. , besides traditional investors such as Honda and Toyota shows the strong development potential of motorbike and automobile industries.

Piaggio Vietnam Co. Ltd recently increased its investment in the northern province of Vinh Phuc from US$75 million to US$165 million to expand its operations

Business support mechanisms

According to the Vietnam Association of Supporting Industries (VASI), Vinh Phuc has 16 first-tier domestic companies in motorbike, electronics and automobile supply chain for foreign direct investment (FDI) companies in Vietnam as a tier 1 supplier, ranked 4th in Vietnam. In addition, the province has relatively good traffic connectivity with other northern localities. This is considered a good foundation for the province to further boost the supporting industry, especially in automobile and motorbike sectors in the coming time.

An official from the Department of Planning and Investment said: Vinh Phuc has many other domestic direct investment (DDI) companies along with automobile and motorbike supply chains operated by FDI firms. For example, Thanh Thang Technology Co., Ltd (based in Binh Xuyen Industrial Park) produces metal parts for car seats and fuel tanks for Toyota Boshoku Hanoi Co., Ltd and is the first-tier supplier for Toyota Motor Vietnam Company. Thien My Vinh Phuc Co, Ltd (Khai Quang Industrial Park, Vinh Yen City) invested in three modern plating lines, becoming a long-term partner of many giant manufacturers like Toyota, Honda, Yamaha, Piaggio and Denso.

Although the number of first-tier DDI producers in FDI supply chains ranks 4th in the country, the scale is small compared to those in other localities, thus failing to meet FDI firms’ demands, right in the province.

DDI companies mainly focus on mechanical supplies while some others are engaged in processing stages. Even, FDI companies cannot find qualified suppliers for many important stages.

To encourage more companies to join automobile and motorbike production chains, the province introduced many specific support policies. In late 2021, the Provincial People’s Committee issued Decision No. 3663 on supporting industry development program in 2021-2025, with a vision to 2025, aiming to have over 50 producers of components and spare parts qualified to become first-tier or second-tier suppliers for automobile, motorbike and electronics manufacturers.

About 10 domestic industrial manufacturers can participate in the value chain of big corporations whose products meet international standards and participate in the export market; connect and build a consultant network and improve domestic and foreign businesses.

The SME Support Project in 2022-2025 states the goal that the province will have five industrial clusters and value chains in five potential industries such as information technology, electronics, mechanical manufacturing, high-tech agriculture and agricultural processing by 2025. Besides, the province assigned relevant bodies to launch mechanisms and policies to pilot industrial clusters in some localities for a number of products in priority industries based on competitive advantages, expertise and value chains such as automobile and motorbike.

Vinh Phuc province will support the development of suppliers in priority industries; improve the capacity of DDI companies to meet the requirements of FDI customers and join global supply chains; and promote capable DDI companies to join the value chain, and introduce typically manufactured industrial products of Vinh Phuc province.