Le Van Tuan, General Director of the Vietnam Construction andMachinery Installation Corp (Lilama) and Vice Chairman of the VietnamAssociation of Mechanical Industry (VAMI), said the domestic mechanicalindustry has recently lacked a fundamental factor being the market. There mustbe a market to get jobs and innovation. The market factor greatly determinesthe development of the mechanical industry.

To have a market for the mechanical industry, Tuan has suggestedthat the State needs to have a separate mechanism for the industry.Specifically, policies to encourage the use of domestically-made mechanicalproducts are needed. Vietnam should import only products that are not able tobe produced at home. That will help the domestic mechanical industry have amarket for development.

Many businesses have proposed that it is necessary to create goodconditions for businesses in terms of finance, technology, development of humanresources, trade promotion, and connection between supply and demand.

Deputy Minister of Industry and Trade Do Thang Hai said that themechanical sector is one of the industries acting as a driver for economicgrowth.

The ministry with State management responsibility for themechanical industry has proposed that the Government promulgate many importantpolicies and strategies to develop the industry.

It has also synchronously implemented many measures to supportdomestic production and business, diversify supply sources, enhance tradepromotion and expand markets.

At the same time, it has coordinated with ministries, branches andlocalities to support mechanical enterprises in responding to trade barriersand trade defence measures to develop the domestic mechanical industry.

Dao Phan Long, former VAMI chairman, said it is forecast that themechanical industry will continue to face difficulties, including reduced marketdemand due to lower consumption in the unstable international politicalsituation.

Additionally, the devaluation of many strong currencies has led toprice increases of raw materials and services, reducing production.

Dinh Hong Quan, Standing Vice Chairman of the Association ofMechanical Enterprises of Bac Giang province, said that Bac Giang's mechanicalindustry has manufactured advanced equipment in many plants such as hydropower,wind power and garbage incinerators. However, most businesses are small scaleand lack connection.

Therefore, his association recommends that the ministry createsfavourable conditions for the businesses to participate in trade promotionprogrammes. Along with that, the State should have a policy to require FDIenterprises to increase the localisation rate for mechanical products.

Truong Thi Chi Binh, Vice Chairwoman and General Secretary of theVietnam Supporting Industry Association, said that mechanical products are verydiverse, so Vietnamese trade counsellors abroad need to provide moreinformation about the market and customers for local enterprises. This is alsoan opportunity for domestic mechanical enterprises to improve productionability.

Vietnamese mechanical enterprises have never faced difficulties asthey do now; they do not have consumption because domestic public investment isextremely stagnant.

Mechanical enterprises do not enjoy any incentives in terms ofloans, land lease or export tax, while the mechanical industry needs large andlong-term capital investment, and large factories.

Therefore, VAMI would propose to adjust the mechanical developmentstrategy for the new development period and develop key mechanical products.The association also suggests the State issue mechanisms and policies that themechanical industry can provide services, machinery and equipment for keynational projects.

Besides, it will strengthen the connection among businesses in theassociation to have proposals on mechanisms and policies and to removedifficulties for them.

VAMI will also focus on proposing to the Government mechanisms andpolicies to increase localisation in products for projects in fields such aswind power, gas power, railway, airports and seaports, and agriculturalmachines.

The association will propose a localisation roadmap with theparticipation of domestic mechanical enterprises to help them improve theircapacity, creating momentum for exports.

Meanwhile, the ministry requests VAMI to further strengthencoordination with the Government and localities in building and completingimportant strategies and policies to develop the industry.

They include to adjust the Vietnam Mechanical Industry DevelopmentStrategy; preferential policies on taxes, land and credit for mechanical enterprises;and policies for market development and industry localisation.

In addition, VAMI needs to coordinate with the Government to builda mechanism to develop and attract high-quality human resources for themechanical industry; and promote cooperation between the businesses andvocational training facilities.

The enterprises should also continue to strengthen informationconnection among them to avoid overlapping investments and unfair competition.

According to VASI, the domestic mechanical market has seen ordersdecrease by about 20%, while some businesses see reduction by 30% to 40%.

In recent years, the domestic mechanical industry has been heavilyaffected by the global COVID-19 pandemic, so the market has reducedconsumption, while the industry faces increased raw material prices and supplychain disruption.

The US-China trade war and the prolonged Russia-Ukraine conflicthave also increased difficulties for the businesses.

Many businesses are struggling to survive, so they could notaccess new technology and pay attention to digital transformation.

The Government has introduced supports in technologicalinnovation, capital, supporting industry development, import tax exemption andreduction, but many domestic enterprises, especially mechanical businesses,still have difficulty accessing them./.