The Vietnam Investment Review reports that Toyota Vietnam has launched a project to export $20 million of domestically produced auto parts per year, the first of its kind in Vietnam. The report says the company is to purchase auto parts from Denso and Harada Vietnam – producers with combined output of 1 million parts per year – and export them to Toyota factories in Thailand, Indonesia, Argentina, South Africa and India.
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Construction began last week on a $5.2 export-processing centre in Vinh Phuc province. The centre is set to open mid-next year and will label, package and complete export procedures for the 80 per cent of incoming parts. The remainder will be used by Toyota Vietnam in its plants. The export centre is being constructed under Toyota’s global Innovation Multi-purpose Vehicles (IMV) project, which produces IMVs in Japan using imported parts. Production is to start next year with an annual output of 200,000 vehicles.
Toyota Vietnam president Makoto Sasagawa said the project would help synchronise auto part production in Toyota’s global network and take advantage of an online part ordering system to increase efficiency and cost-effectiveness.
“Given the existing advantages of Vietnam, namely abundant resources, low labour costs, stable government and foreign investment incentives, Toyota has decided to take on a new role as part exporter,” Sasagawa told Vietnam Investment Review.
“The auto market in Vietnam is one tenth the size of that of other regional countries and this makes it hard for part makers to survive. Our export solution is therefore a good fit,” he said. By developing Vietnam’s auto part industry, Toyota was encouraging the development of the auto industry as a whole, he said.
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By GlobalDataThe government is encouraging auto assemblers to use more locally produced parts; most assemblers use only 10 per cent domestically produced parts. The government increased taxes on imported parts from 20 to 25 per last month and is considering a further hike to encourage more domestic production.
