Vietnam is rapidly emerging as a manufacturing powerhouse for automotive components, with significant new investments and plant inaugurations marking 2026 as a pivotal year for the sector. On June 15, 2026, Automech Mechanical Equipment and Solutions Joint Stock Company officially held the inauguration ceremony for its second production plant in the Vietnam-Japan Industrial Cluster[reference:50]. This event marks a significant step in Vietnam’s strategy to expand its production capacity and deepen participation in the supporting industrial supply chain[reference:51].
The new Automech plant focuses on manufacturing automotive, motorcycle, and electric vehicle parts, as well as household appliance components[reference:52]. The commissioning of Factory No. 2 helps Automech increase its production capacity for mechanical components and contributes to promoting the localization goal in the manufacturing industry[reference:53]. From this component manufacturing foundation, Automech expects to gradually drive the synchronized development of related fields such as mold making, jigs, product design, machine manufacturing, automation, and technical services[reference:54].
The success of Automech’s first production plant in Dinh Tram Industrial Park, Bac Ninh, which commenced operations in 2023, created the foundation for this expansion[reference:55]. Factory No. 1 has helped Automech participate in many large-scale projects for customers including VinFast, Kim Long Motor – Hue, SYV, Korean FDI customers, and many partners in the industrial manufacturing sector[reference:56]. This experience has enabled the company to gradually affirm its capabilities as a Vietnamese mechanical engineering enterprise in the modern manufacturing supply chain[reference:57].
Vietnam’s automotive components sector is being driven by several factors. The government’s policies to promote private sector development, support manufacturing businesses, and develop supporting industries are important foundations for domestic mechanical engineering companies to expand[reference:58]. The country is also strengthening its position within ASEAN’s EV supply chains[reference:59], with BYD partnering with Kim Long Motors to build a USD 130 million battery factory in central Vietnam, completing the electric vehicle supply chain and taking advantage of the 0% export tax rate to ASEAN.
The company is currently researching a project to build a complex of factories dedicated to CNC machining, automation equipment, and specialized industrial production, with the goal of creating a research and development center serving Vietnam’s mechanical and related industries[reference:60]. This investment in advanced manufacturing capabilities positions Vietnam as an increasingly important player in the regional automotive supply chain.
Vietnam’s strategic location, competitive labor costs, and favorable trade agreements make it an attractive manufacturing base for companies serving the ASEAN region. As the country continues to develop its manufacturing capabilities, it is poised to become an increasingly important player in the regional automotive supply chain, offering significant opportunities for buyers and suppliers seeking cost-effective sourcing and strategic partnerships.
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