A well-developed automobile market, an abundant rubber supply, a cheap labor force and reasonable tax policies all help make Vietnam an attractive market for foreign tyre manufacturers.
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A well-developed automobile market, an abundant rubber supply, a cheap labor force and reasonable tax policies all help make Vietnam an attractive market for foreign tyre manufacturers.
Rubber exports to hit US$1.6 billion Vietnam hopes to join Int’l Tripartite Rubber Council In late September, Kenda, an investor from Taiwan (China), received an investment license for setting up a tire factory in Vietnam, capitalized at US$160 million. The factory, located in Giang Dien Industrial Zone in Dong Nai province, is expected to employ 4,000-5,000 workers.
This is Kenda’s second tire factory in Vietnam. The first one, with investment capital of US$100 million, is in Ho Nai Industrial Zone in Dong Nai province.
Ying Ming Yang, Kenda’s president, said the factories will make products for export from rubber materials in Dong Nai.
Prior to that, in late 2014, Bridgestone Vietnam, a subsidiary of Japanese Bridgestone Group, inaugurated the factory radial tyre factory in Dinh Vu Industrial Zone in Hai Phong City. The US$448 million factory is expected to churn out 6,000 products a day.
According to Bridgestone’s general director Tetuo Kunitake, the factory’s capacity would be raised to 10,000 products a day by the end of the year.
Japanese Bridgestone has just announced it would continue pouring more capital into Bridgestone Vietnam to raise the capacity of the factory to 25,000 products by the first half of 2016 and 49,000 products by the second half of 2017.
Kumho Tire, a subsidiary of Kumho Asiana, well known in Vietnam as a large real estate developer from the Republic of Korea, has injected US$100 million more into its operational factory in Binh Duong province to raise the factory’s capacity from 3.3 million to 5 million products a year.
The increased expansion by foreign-invested enterprises has forced domestic manufacturers, including Casumina and DRC, to scale up their production.
In late 2014, Casumina inaugurated a radial tire factory which has investment capital of US$160 million and the designed capacity of 1 million products a year.
Prior to that, DRC put into operation a radial tire factory which puts out 175,000 products a year now and is expected to churn out 600,000 products by 2018.
Promising market
The Vietnamese tire market has bounced back after two years of decline. Over 158,000 products were sold in 2014, an increase of 43% over 2013, while the figure is expected to reach 200,000 this year.
The projected target is within reach as 142,000 cars were sold in the first eight months of the year, according to the Vietnam Automobile Manufacturers’ Association (VAMA).
MOIT predicted that car sales would increase sharply in the time to come, especially when many free trade agreements take effect. The car sales are predicted to surge to 1.5-1.8 million products by 2030.
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