Vietnam’s automotive components sector is experiencing remarkable growth in 2026, driven by record investments, expanding manufacturing capacity, and the country’s emergence as a key player in ASEAN’s automotive supply chains. On June 15, 2026, Automech Mechanical Equipment and Solutions Joint Stock Company officially inaugurated its second production plant in the Vietnam-Japan Industrial Cluster in Bac Ninh with a total investment of 250 billion VND (approximately USD 10 million), affirming its position in the global supply chain[reference:50]. This article examines the key developments driving Vietnam’s automotive components sector growth.
The new Automech plant focuses on producing components and sub-assemblies for car and electric motorcycle bodies, as well as metal parts and sub-assemblies for household electrical appliances and supporting industries[reference:51]. The project received a total investment of nearly 200 billion VND in phase 1; further investment in modern production lines and equipment is planned for phase 2, raising the total investment to approximately 250 billion VND[reference:52]. The production line is invested in with a high degree of automation, meeting modern manufacturing standards and contributing to enhancing the competitiveness of Vietnamese businesses in the global supply chain[reference:53].
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. According to Mr. Luong Duc Thu, Chairman of the Board of Directors of Automech, the company has identified technology, innovation, and automation as the core foundation for sustainable development[reference:54]. The company continuously invests in research, development, and application of advanced technologies, building a production system based on the smart factory model, aiming to provide products that meet international standards[reference:55]. Bringing Factory No. 2 into operation not only aims to meet the company’s production expansion needs but also demonstrates its determination to participate more deeply in domestic and international supply chains[reference:56].
Vietnam’s automotive components sector is being driven by several factors. The country’s strategic location, competitive labor costs, and favorable trade agreements make it an attractive manufacturing base for companies serving the ASEAN region. South Korea remains the largest foreign investor in Vietnam with a total registered capital of over US$95.2 billion, accounting for approximately 18% of total investment[reference:57]. In the first two months of 2026 alone, capital inflows from South Korea reached nearly US$2 billion, representing 32.7% of total registered capital—a figure demonstrating confidence and a stable trend of expanding investment[reference:58].
Vietnam is strengthening its position within ASEAN’s EV supply chains, 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:59]. In the context of increasingly fierce competition, Vietnamese supporting industry enterprises need to invest systematically and improve their technological capabilities to meet the standards of major markets such as the US, Europe, and other developed economies[reference:60].
In conclusion, Vietnam’s automotive components sector is experiencing remarkable growth driven by record investments, expanding manufacturing capacity, and the country’s emergence as a key player in ASEAN’s automotive supply chains. As Vietnam continues to develop its manufacturing capabilities and attract foreign investment, 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.
Leave a Reply