Thaco with the strategy of increasing localization

Thaco continues to make strategic investments to increase domestic production content by developing new supporting industrial plants such as plastic parts factories; air-conditioner for trucks and buses; bus chassis; automobile exhaust pipe; Hydraulic cylinder; automotive wheels; automotive fuel tanks; Spare parts for passenger cars and mechanical components other than the automobile industry.

In order to meet the requirements of large-scale mass production and still meet the individual requirements of each specific customer, Thaco has focuses on building R&D Center to improve the labour’s ability in researching and developing the automotive products, spare parts; and expanding research and development of agricultural mechanical equipment, construction mechanical equipment and other industrial equipment.

At the same time, the enterprises also promote joint ventures to receive new technology transfer in order to improve the technology content in products and receive technical support for manufacturing spare parts trucks, buses based on technology transferred from Korea and Japan.

The localization strategy is implemented by the priority route of large and bulky products (high transportation cost), availability of domestic raw materials, product groups and technologies which is prioritized for developing by the government. For trucks and buses, Thaco will boost the localization of high-value and high-tech components such as chassis, wheels, fuel tanks and compressed air systems (including compressed air and piping system), cooling water tank, door, capo, etc.

Currently, Thaco’s automobile products have achieved localization rates of 15-25% for cars, 35-45% for trucks and 60% for buses. In particular, the bus is also the vehicle that is considered as Vietnamese brand product. Since 2018, Thaco has exported bus products to Thailand and Philippines markets and will export to Cambodia, Singapore and Taiwan markets in near future. For passenger cars, enterprises are implementing plans to export Kia Sedona passenger cars to Thailand market; and actively increase the localization rate of Mazda and Peugeot passenger cars to export to ASEAN countries by 2020.

For agricultural machines, Thaco has proposed a localization plan for KAM50 tractor, which will initially produce inland in Chu Lai with nearly 200 components including plastic components, mechanical components, seats, wires, car lights, etc. to achieve a localization rate of 50%. In manufacturing spare parts, Thaco has completely mastered the manufacturing technology of components such as glass, chair, tweezers, electric wires, mechanical components (car body, exhaust pipe, tire, bus frame, punching components, etc.), plastic components (plastic barriers, interior plastic components, etc.), air conditioning systems, composite components, etc.

Localization is the key to help businesses, especially enterprises in the automotive industry, to master technology, manage production, improve competitiveness and reduce product costs. At the same time, businesses will also be proactive in supplying materials and spare parts for production and increasing domestic production content, meeting export requirements.

For Thaco, the localization roadmap basically implemented with the steps and specific solutions help achieve positive results. Localization is expected to help businesses improve their competitiveness not only in the domestic market but also in the regional and world markets, thus contributing practically to the development of the automobile industry and supporting industry, motivating the development of other industries.

Productivity and Quality Office