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Sat. PM KTFA Vietnam News Articles 1-28-23

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KTFA

Vietnam News

Henig » January 28th, 2023

Toyota joins hands with local auto supporting industry firms

January, 28/2023 – 09:04

Domestic manufacturers have paid much attention to enhancing localisation rate by investing more in supporting industries. Auto supporting industry is not apart from that process, as localisation rate has gradually help reduce import of components.

HÀ NỘI — Việt Nam’s manufacturers have enhanced the localisation rate by investing more in supporting industries. The auto supporting industry is not apart from that process, as increased localisation has gradually helped reduce the importation of components.

From 2018, import tariffs on automobiles from ASEAN countries have been reduced to zero percent for Completely Built Units (CBU), posing a major challenge for domestic manufacturers, who are already facing intense competition from neighboring countries such as Thailand and Indonesia.

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In particular, Việt Nam signed two new generation Free Trade Agreements (FTAs), including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA). The EVFTA agreement will cut the average tariff 6-7 per cent yearly, paving the way for imported cars to enjoy zero tariffs from 2030. The zero tariff will become a great challenge for Việt Nam’s automobile industry and its supporting industries as well.

As a leading automobile manufacturer in Việt Nam, with strong potential and large-scale production, Toyota Motor Vietnam (TMV) has constantly made efforts to increase the localisation rate in Việt Nam. The company has actively developed new strategies by working towards sustainable development.

Apart from manufacturing and assembly, TMV has also focused on promoting the use of domestic components. By doing so, TMV has increased its localisation rate of some models to over 40 per cent. In particular, the Toyota Veloz Cross and Avanza Premio have been locally assembled in Việt Nam since December 2022 after a year of being sold as imported CBUs. About 300 components on the Veloz Cross and Avanza Premio models are localised, contributing to the localisation of Việt Nam’s automobile industry.

Director General of Toyota Vietnam Hiroyuki Ueda described the move as an important milestone of the carmaker in the country and also the affirmation of its commitment to promoting local automobile manufacturing.

According to TMV, the company has always made efforts to actively seek and support domestic suppliers, helping them improve their management capacity to meet Toyota’s quality requirements.

Since 2018, TMV has established a specialised unit to support suppliers, giving priority to Vietnamese suppliers. The unit aims to help local suppliers to improve working efficiency and product quality, while lowering production cost.

According to a Toyota representative, Vietnamese enterprises often have limited experience and do not meet the quality requirements to become a global supplier of automobile spare parts and components. Therefore, Toyota has enhanced the capacity of local suppliers in the 5S system, which includes productivity, safety, cost control, service delivery and quality management.

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In June 2022, TMV and the Industry Agency under the Ministry of Industry and Trade signed a Memorandum of Understanding for a project to enhance the domestic supporting industry.

The project aims to strengthen the capability and cooperation between domestic enterprises and automakers from 2022 to 2023.

It is the third year Toyota Vietnam and the agency have worked on the project, demonstrating the firm’s efforts to increase the localisation rate, support Vietnamese suppliers, and a commitment to accompany the development of the Vietnamese automobile and supporting industry.

— VNS    LINK

Outstanding loan falls sharply in Q4

January, 28/2023 – 08:37

According to estimation, as of the end of 2022, outstanding loan balance of securities firms was VNĐ120 trillion (US$5 billion), a decline of VNĐ40 trillion over the previous quarter.

HÀ NỘI — The Vietnamese stock market witnessed a turbulent year in 2022. In the last quarter of 2022, the market plunged and hit a two-year low of below 900 points in the middle of last November. 

The quick and strong recovery helped the VN-Index recoup the majority of its losses before being corrected, and it ended the quarter with an 11 per cent drop.

After a slight gain in the third quarter of last year, the whole market’s outstanding loan balance posted a significant decrease in the fourth quarter. According to estimations, as of the end of 2022, outstanding loan balance of securities firms was VNĐ120 trillion (US$5 billion), a decline of VNĐ40 trillion over the previous quarter. The amount excluded triparty loans. 

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Of the outstanding loan balance, margin lending accounted for around VNĐ115 trillion, while the rest was cash advances. Margin balance of the whole market was estimated to fell about VNĐ40 trillion over the previous quarter. 

After peaking in the first quarter of last year, the market’s margin balance tended to fall after a force-sale wave. On the other hand, many securities firms also raised capital dramatically in the past year. 

Therefore, the margin to equity ratio at most securities was below 1x at the end of 2022 instead of approximately 2x (the maximum prescribed level) as of March 31, 2022. This means that securities companies still have room to lend, and the pressure to raise capital is no longer as urgent as it was a year ago.

Foreign securities companies have been competing with and even surpassing domestic enterprises in some aspects. For example, in the lending race, Mirae Asset has been leading for many quarters in terms of outstanding loans, while KIS and KB Securities were also in the top list.

While most domestic securities companies saw sharp decreases in outstanding loans, according to statistics in the fourth quarter of last year, foreign ones still maintained stable lending activities. 

Lending activities shrank due to unfavorable movements in the general market.

With great financial potential, foreign securities companies are ready to raise capital and cause great competitive pressure in all aspects, from service quality to the number of branches and especially in the ability to provide loan services. 

The huge development potential of the Vietnamese stock market is expected to continue to push the group of foreign securities companies to spend money to gain market share, and if there are no more breakthrough changes, it is likely that domestic securities companies will be lagging behind.

VNS   LINK

Supermarkets, traditonal markets gradually resume normal operations amid abundant supply

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January, 28/2023 – 10:05

Many supermarkets in HCM City such as Co.opmart, Co.opXtra, Co.op Food, Go!, Big C, Tops Market, and AEON opened from January 23, the second of the new year.

HCM CITY — Many supermarkets in HCM City such as Co.opmart, Co.opXtra, Co.op Food, Go!, Big C, Tops Market, and AEON reopened on January 23, the second of the new year.

Traditional markets too have been gradually reopening since January 23, especially those that sell fresh foods, flowers, fruits, and vegetables.

According to a Ministry of Finance report on the market and prices, sales in the city’s wholesale markets on the fourth day of the new year (January 25) were 31-52 per cent of normal while prices were mostly normal. 

The volume of vegetables and fruits arriving at the Thủ Đức Wholesale Market was 1,172 tonnes, or 52 per cent of normal days and an increase of 28.5 per cent from the same period last year.

At the Hóc Môn Wholesale Market it was 860 tonnes, which was equal 48 per cent of normal days and a decrease of 12 per cent from last year.

Supermarkets have also launched many promotions after Tết to stimulate demand.

From January 25 to 27 customers at Co.opmart with bills worth VNĐ500,000 or more have the chance to receive vouchers worth VNĐ30,000-500,000 under its ‘Hái lộc đón phúc – Sung túc cả năm’ programme.

The supermarket chain is also offering discounts on confectionery, milk and dairy products, vegetables, fruits, household utensils, cosmetics, clothes, and others.

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— VNS   LINK

Retail market predicted to recover in 2023

January, 28/2023 – 09:06

Although 2023 is forecast to see many difficulties, experts expect it will be a recovery year for the retail sector after the COVID-19 pandemic as there are many signs showing the return of investors and higher demand.

HÀ NỘI — Although 2023 is forecast to see many difficulties, experts expect it will be a recovery year for the retail sector after the COVID-19 pandemic as there are many signs showing the return of investors and higher demand.

According to the Ministry of Industry and Trade (MoIT), the scale of the Vietnamese retail market is US$142 billion, which is expected to reach $350 billion in 2025, with contributions of 59 per cent to total GDP.

Last year, the total revenue from retail sales of goods and services rose 21 per cent, exceeding the target of 8 per cent.

A survey by Vietnam Report showed that over 53.8 per cent of total retail firms enjoyed similar and higher business results compared to the pre-pandemic level.

Experts held that the growth of retail sales is being supported by a rise in incomes and the strong recovery of the tourism sector as well as relevant sectors such as transport and accommodation, as well as the effectiveness of inflation control measures.

Additionally, there are signs of vibrant retail activities as many foreign investors have announced their plans to return after the pandemic.

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Recently, Thailand’s Central Retail said that it will pump additional VNĐ20 trillion ($852.87 million) into the Vietnamese market in the next five years, pushing its investments in Việt Nam in the 2022-2026 period to VNĐ65 trillion. With this plan, Central Retail will raise their coverage from 40 localities currently to 55.

Meanwhile, Japanese giant retailer Aeon Group plans to build another megamall in Hà Nội, raising its total trade centres in Việt Nam to 20.

Phùng Trung Kiên, Founder of Vietnam Holdings Inc, said that retail businesses will see good growth in early 2023, especially those trading consumer goods thanks to the Lunar New Year Festival.

In 2023, four trade centres are scheduled to be launched – Central Premium plaza, Vincom Megamall Grand Park, Sunrise City Central and Emart 2 with total area of over 116,000 sq.m.

Many experts predicted that this year, retailers will expand their selling channels, bringing their products to different trading platforms to optimise online retail channels.

— VNS   LINK

Source: Dinar Recaps

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