In the third quarter of 2023, Vietnam's socio-economic situation is undergoing a phase of noteworthy transformation, driven by critical factors such as GDP, CPI, and the dynamic state of the labour market. This period is marked by a robust GDP growth rate, signifying the nation's resilience and potential in the global economy. As the country navigates the intricacies of economic development, it faces multifaceted challenges and opportunities in areas like education, healthcare, and infrastructure. This article aims to dissect the current socio-economic situation, highlighting the significance of these key indicators while delving into the nuanced interplay of forces that define Vietnam's evolving landscape.

Economic Performance Indicators

GDP Growth and Key Sector Contributions

In the third quarter of 2023, Vietnam's socio-economic landscape underwent a series of notable shifts. The nation's GDP growth rate held steady, registering an estimated 5.33% year-on-year expansion, reaffirming its economic vigor. 

Over the initial nine months of the year, key sectors played distinctive roles in shaping Vietnam's economic performance. The agro-forestry-fishery sector reported a 3.43% increase, demonstrating its ongoing importance in supporting the nation's sustainable growth. The industrial and construction sector contributed significantly with an expansion of 2.41%, reflecting its resilience and potential.

Perhaps most notably, the service sector, encompassing diverse domains like finance, healthcare, and education, posted an impressive 6.32% growth. As reported by the General Statistics Office (GSO), this sector played a pivotal role, contributing 68.57% to the overall economic expansion. This growth underscores the adaptability and innovation characterizing the Vietnamese services industry.

Inflation Concerns and Economic Realities

However, amidst these achievements, inflation rates remained a concern, as they can affect consumer purchasing power and overall market stability. According to GSO data, in September, the CPI increased by 1.08% compared to the previous month, rising 3.12% since December 2022, and 3.66% compared to the same period last year. The average CPI recorded during the third quarter of the year grew by 2.89% in comparison to the third quarter of 2022.

While the economic picture demonstrates progress, the report by the GSO portrays an environment that remains challenging, with Vietnam striving to meet its ambitious economic growth targets set by the National Assembly. The GDP growth in the first nine months of 2023 reached a modest 4.24%, falling short of the targeted 6%-6.5% growth for the entire year. This shortfall reflects both external challenges, as the global economy faces a downturn, and internal economic difficulties, including high inflation, stringent financial and monetary conditions, and fluctuations in financial and real estate markets. These circumstances collectively weigh on investors' confidence.

Expectations at the end of the second quarter had suggested that Vietnam needed to achieve a growth rate of 8-9% in the last two quarters to attain its annual growth target. However, the data from the third quarter paints a more challenging reality, necessitating a substantial push for double-digit growth in the final quarter. These economic dynamics emphasize the importance of proactive economic policies, adaptability, and resilience as Vietnam navigates the complexities of its socio-economic landscape.

Growth in Vietnam's Labor Force

Expanding Labor Force

According to the report by GSO, in the third quarter of 2023, Vietnam's labor force, comprising individuals aged 15 and older, witnessed growth, reaching an estimated 52.4 million people. This reflects an increase of 92.6 thousand individuals compared to the previous quarter and a notable rise of 546 thousand individuals over the same period last year. Among these, employed workers numbered approximately 51.3 million, demonstrating an increase of 87.4 thousand people compared to the previous quarter and a substantial expansion of 523.6 thousand workers over the same period in the previous year.

Stable Unemployment and Underemployment Rates

The unemployment rate among the working-age population remained relatively stable at 2.3% during the third quarter of 2023, showing no significant change when compared to the previous quarter but marking a slight increase of 0.02 percentage points from the same period last year. Similarly, the underemployment rate among working-age individuals stood at 2.06%, maintaining consistency with the previous quarter but indicating a noteworthy rise of 0.14 percentage points compared to the same period in the previous year.

Positive Income Trends

As per the GSO report, a significant gauge of socio-economic well-being, the average income of workers during the third quarter of 2023 was estimated at 7.1 million VND per month. This represents a promising increase of 146 thousand VND when compared to the second quarter of 2023, signifying a positive trend in income growth. Furthermore, when contrasted with the same period in the previous year, the average worker's income demonstrated substantial growth, surging by 359 thousand VND. These developments underscore the progress in income stability and economic well-being among the labor force in Vietnam during the third quarter of 2023.

Challenges and Opportunities in Vietnam's Economic Development

Meeting Growth Targets Amid Complex Landscape

The pursuit of achieving Vietnam's growth target of 6-6.5 percent for the year remains a formidable challenge, requiring a concerted effort to overcome. Recent adjustments to growth projections by the Ministry of Planning and Investment reflect the complex landscape facing the country. In the most optimistic scenario, a 6 percent economic growth for the entire year necessitates a remarkable 10.6 percent increase in the fourth quarter. The second scenario envisions a 5.5 percent economic growth in 2023, requiring an 8.8 percent increase in the fourth quarter. The least favorable scenario involves a 5 percent growth, demanding a 7 percent surge in the fourth quarter. These scenarios underscore the need for substantial economic rejuvenation in the remaining months of the year.

Hurdles in Economic Restructuring

The economic restructuring program, integral to sustainable growth and development, encounters its own share of hurdles. Out of the 30 targets set by the National Assembly's Resolution 31/2021/QH15, only 10 are expected to be attainable. Thirteen of these goals, especially those related to productivity enhancement, pose significant challenges. Overcoming these obstacles hinges on several critical factors. Effective coordination of monetary policy and fiscal easing are vital, as is the need for ongoing reform to reduce transaction costs for businesses and restore market confidence.

A Multi-Faceted Approach for Economic Reinforcement

To bolster economic growth, a multi-faceted approach is required, beginning with the anticipation of more favorable external factors. Implementing support policies, including demand stimulation, market diversification, public investment promotion, and the utilization of Free Trade Agreements (FTAs), remains crucial. Additionally, sustained business support measures, such as debt relief, reduced market interest rates, and preferential credit packages, along with fiscal policies involving tax and fee reductions, are necessary to reinforce the business environment. This dynamic approach is indispensable for steering Vietnam's economy towards achieving its ambitious growth targets in the face of persistent challenges.

In summary, the socio-economic situation in Vietnam for the Q3 of 2023 is marked by notable indicators. While GDP growth has been recorded at a robust 5.33%, it is imperative to recognize that inflation, reflected in the CPI, increased by 1.08% in September. The economic landscape features a 3.43% expansion in the agro-forestry-fishery sector and a 2.41% growth in the industrial and construction sector, while the service sector significantly contributed with a 6.32% uptick. The labor force also exhibited positive trends, with more employed workers, but the country still faces an unemployment rate of 2.3%. As we look ahead, these insights underscore the significance of continuous analysis and strategic planning. For comprehensive perspectives and guidance in navigating Vietnam's dynamic socio-economic environment, turn to Viettonkin - your partner for success.

Foreign investment in Vietnam has reached unprecedented levels, making it a red-hot destination for global investors. This Southeast Asian gem boasts a thriving investment climate, driven by robust FDI statistics and a strategic position for investing. With the government's investor-friendly policies and a booming economy, FDI in Vietnam is surging, creating significant opportunities for those seeking to capitalize on the country's growth story. In this article, we'll explore the factors underpinning the foreign investment boom and delve into the statistics, industries, and incentives that are attracting investment to Vietnam. Join us as we unravel the reasons behind this surge and why investing in Vietnam is becoming increasingly attractive for global players.

The Surge in Foreign Investment

Surging Foreign Direct Investment (FDI)

Foreign investment in Vietnam has experienced an extraordinary surge in recent years, firmly establishing the country as a magnet for global capital. The statistics tell a compelling story: In the first nine months of 2023, FDI in Vietnam reached an impressive $20.21 billion, reflecting a remarkable 7.7% increase compared to the same period in the previous year. This surge is not an isolated event; it's part of a broader trend of increasing investor confidence in Vietnam.

Notably, the records for foreign investment have been consistently broken in Vietnam. In 2022, the country achieved an all-time high in terms of FDI disbursement, eclipsing the previous record by a substantial margin. This attests to the mounting confidence international investors place in Vietnam's economic potential.

Diverse Industry Involvement in Foreign Investment

The surge in foreign investment is distributed across various industries and sectors. Processing and manufacturing, in particular, has emerged as a magnet for foreign capital. For instance, as of September 20, 2023 this sector saw a 15.5% increase in foreign investment year-on-year. Additionally, real estate, banking and finance, wholesale and retail have all experienced substantial inflows, contributing significantly to Vietnam's economic growth.

Global Investors' Foothold in Vietnam

It's important to note that these investments originate from a range of countries, including but not limited to Singapore, Japan, South Korea, China, and the United States. For example, Singapore-based companies have poured substantial investments into Vietnamese manufacturing facilities, while Japanese firms have shown great interest in research and development centers, highlighting Vietnam's appeal as a technology hub.

To illustrate the tangible impact of this surge in foreign investment, consider the case of the Samsung Electronics Complex in Thai Nguyen province. This mammoth project, with an impressive investment of $7.5 billion, has become a symbol of Vietnam's attractiveness to investors. It's not only a substantial source of employment, providing jobs to over 38,500 workers, but also a crucial contributor to Vietnam's export growth.

Factors Driving Foreign Investment Growth

Proactive Government Policies

The remarkable surge in foreign investment in Vietnam can be attributed to a confluence of factors that make the country a magnet for global investors. One key driver is the Vietnamese government's proactive stance in facilitating foreign investment. Over the years, Vietnam has consistently improved its business environment through a series of legislative and policy reforms. These efforts have simplified administrative procedures, reduced bureaucracy, and enhanced transparency, providing a friendlier ecosystem for investors.

Government initiatives such as key economic zones (KEZs) have also played a pivotal role. These designated zones offer tax incentives, streamlined regulatory processes, and superior infrastructure, luring foreign investors seeking favorable conditions for their businesses.

Strategic Location and Gateway to ASEAN

Vietnam's strategic location in Southeast Asia further bolsters its appeal. Situated at the crossroads of key trade routes, the country serves as a gateway to the ASEAN market of over 600 million consumers. This strategic advantage has made Vietnam a preferred destination for companies looking to establish regional hubs, access regional markets, and participate in global value chains.

Skilled Workforce and Vocational Training

Vietnam's abundant, skilled labor force is another significant factor. The country boasts a youthful and tech-savvy population, making it an ideal destination for companies seeking a well-educated workforce. Moreover, the government has continually invested in vocational training programs to ensure a steady supply of skilled workers.

Robust Infrastructure and Efficient Supply Chains

The robust infrastructure in Vietnam, including modern ports, highways, and logistics facilities, has been a critical driver of investment. This infrastructure supports efficient supply chain management and reduces operational costs for businesses, further enhancing the country's attractiveness.

Global Economic Trends and Supply Chain Diversification

Global economic trends have played a role in the surge of foreign investment in Vietnam. The reconfiguration of supply chains due to factors like the US-China trade tensions and the COVID-19 pandemic has prompted companies to diversify their production bases. Vietnam, with its stable political climate and growth prospects, has emerged as a preferred alternative for many companies.

The Impact of Foreign Investment on Vietnam's Economy

Robust GDP Growth and Economic Resilience

The surge in foreign investment in Vietnam has left an indelible mark on the country's economy. A primary indicator of this impact is the robust growth in Vietnam's GDP. The influx of foreign capital, coupled with an expansion of industries, has contributed significantly to Vietnam's economic development. In recent years, Vietnam has consistently maintained impressive GDP growth rates, making it one of the fastest-growing economies in Southeast Asia. According to a report by the Singapore-based United Overseas Bank (UOB), Vietnam's GDP growth rate is anticipated to reach 6.6% in 2023, and it is expected to remain above 6% in the coming years, largely driven by foreign investment.

Diversification of Investment across Industries

One notable effect of increased foreign investment is the diversification of industries and regions that benefit from it. Traditionally, foreign investment was concentrated in processing and manufacturing and export-oriented sectors. However, as Vietnam's economy matures, investors are now exploring a broader range of industries. This diversification has led to increased economic resilience, as the country is less dependent on a single sector. For instance, the service sector has seen a significant uptick in foreign investment, with the retail and e-commerce industries witnessing substantial growth.

Foreign-invested enterprises (FIEs) have made significant contributions to Vietnam's export landscape, utilizing the country's favorable conditions to excel on the global stage. Take the case of Nestlé, the Swiss multinational food and beverage company, which expanded its operations in Vietnam. By establishing production facilities in the country, Nestlé not only met the surging demand for its renowned products but also bolstered Vietnam's reputation as an export hub for top-quality food and beverages. This strategic investment has substantially added to Vietnam's export earnings and highlighted its capacity to serve as a trusted and efficient source for consumer goods.

Embracing Sustainable and Responsible Investment

The surge in foreign investment is aligned with the principles of sustainable development and environmental, social, and governance (ESG) criteria. Foreign investors are increasingly mindful of ESG factors, and they are integrating sustainable practices into their operations in Vietnam. The LEGO factory in Vietnam, for instance, is committed to sustainability by using renewable energy sources and implementing waste reduction initiatives. This not only benefits the environment but also aligns with Vietnam's goals for a greener future.

Beyond short-term gains, the surge in foreign investment is expected to bring long-term economic benefits and sustainability. As the business environment in Vietnam continues to improve and investors expand their presence, the country is likely to witness further economic transformation. This includes the transfer of technology, knowledge, and expertise to the local workforce, which can enhance productivity and competitiveness while promoting sustainable development.

The remarkable surge in foreign investment in Vietnam signifies the nation's position as a highly attractive destination for global investors. Foreign direct investment (FDI) in Vietnam has reached unprecedented levels, propelling economic growth and development. Our exploration of investing in Vietnam has revealed that factors such as strategic location, government initiatives, and a skilled workforce have fueled this investment boom. As we've seen through examples, Vietnam's allure as an investment hub is evident. With a strong commitment to sustainable development, Vietnam's partnership with foreign investors is poised to foster long-term economic prosperity. For expert guidance and support in seizing the wealth of investment opportunities in Vietnam, look no further than Viettonkin. Connect with us today to embark on your investment journey in Vietnam.

Vietnam's role in intra-ASEAN trade and economic cooperation is pivotal in shaping the region's dynamics. Situated at the crossroads of Southeast Asia, Vietnam's strategic geographical location has transformed it into a trade hub of immense importance. In this article, we delve into Vietnam's significance within ASEAN, exploring its location advantages, involvement in key trade agreements, and its contributions to investment and economic cooperation. As we navigate these crucial facets, it becomes evident that Vietnam plays a central role in facilitating and driving intra-ASEAN trade, fostering economic collaboration, and contributing to the region's prosperity.

Vietnam's Growing Significance as an ASEAN Trade Hub

Vietnam's Strategic Geographic Position

Vietnam's strategic location within Southeast Asia positions it as a linchpin for regional trade and economic activities. Bordered by China to the north, Laos, and Cambodia to the west, and flanked by the South China Sea to the east, Vietnam enjoys proximity to key ASEAN countries. This geographical advantage has transformed Vietnam into a bustling trade hub, facilitating the movement of goods, services, and investments throughout the region.

Over the recent period, there has been a swift and substantial development in transportation and logistics infrastructure. The country boasts a network of ports, including major ones in Ho Chi Minh City and Hai Phong, providing vital access for sea-borne trade. Furthermore, an extensive road and railway system connects Vietnam to neighboring nations, facilitating overland transportation. The ongoing development of highways, expressways, and railways continues to enhance the nation's connectivity and accessibility.

Vietnam as an Investment Hub and ASEAN Trade Facilitator

In addition to its geographical and transportation advantages, Vietnam's open-door policy and commitment to economic reforms have attracted an influx of foreign investment. During the year 2022, Vietnam attracted investments from 108 countries and territories, with Singapore leading the way by contributing nearly 6.46 billion USD, representing 23.3% of the total foreign direct investment (FDI) received by Vietnam during that period. The Republic of Korea ranked second, providing 4.88 billion USD, followed closely by Japan with an investment of 4.78 billion USD.

Recent statistics also underline Vietnam's importance as an intra-ASEAN trade hub. For instance, the country's total trade volume with ASEAN reached over 60 billion USD in 2021, showcasing the increasing economic cooperation within the region. This dynamic environment positions Vietnam as a strategic gateway for businesses and investors looking to tap into the burgeoning opportunities of the ASEAN market.

Vietnam's Trade Agreements in ASEAN and Across Border

Vietnam's Role in ASEAN Trade Facilitation

Vietnam's proactive engagement in trade agreements within the ASEAN region has fortified its position as a cornerstone for economic cooperation. The nation's commitment to regional economic integration and cooperation has opened doors to a multitude of opportunities for businesses and investors.

Vietnam's journey towards trade liberalization gained momentum with its entry into the ASEAN Free Trade Area (AFTA) in 1995. This crucial step paved the way for reduced tariffs and enhanced market access among ASEAN member states. AFTA has been a driving force behind increased intra-ASEAN trade, contributing to Vietnam's economic growth.

The establishment of the ASEAN Economic Community (AEC) in 2015 marked another milestone. AEC aimed to create a single market and production base within ASEAN. Vietnam actively participates in AEC initiatives, aligning its policies and regulations with regional standards. This alignment has streamlined cross-border trade, making it easier and more cost-effective for businesses to navigate the ASEAN market.

Furthermore, Vietnam's proactive leadership in regional trade initiatives, such as the Regional Comprehensive Economic Partnership (RCEP), bolsters its reputation as a pivotal player in shaping the future of intra-ASEAN trade. RCEP's ratification promises a new era of trade opportunities within the Asia-Pacific region.

Vietnam's International Trade Agreements

Vietnam's commitment extends beyond ASEAN, as it is a signatory to various international trade agreements. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the EU-Vietnam Free Trade Agreement (EVFTA) are prime examples. These agreements grant Vietnam preferential access to a vast network of global markets and contribute significantly to the nation's export-oriented economy.

Notably, Vietnam's stellar performance in implementing these trade agreements has led to substantial benefits. As of 2021, Vietnam's exports constituted 19% of its GDP, marking a significant rise from the less than 1 percent recorded in 2010. Remarkably, Vietnam's export sector has now outpaced that of Malaysia and Thailand, underlining its remarkable growth in international trade.

Vietnam's strategic involvement in trade agreements and partnerships, both regional and international, underscores its commitment to fostering economic integration and cooperation. These agreements have not only facilitated the movement of goods and services but also propelled Vietnam into the global trade spotlight. The nation's robust trade agreements present compelling opportunities for businesses and investors seeking to tap into the dynamic ASEAN market.

Vietnam's Economic Cooperation and Investment Landscape 

Vietnam's Investment Landscape within ASEAN

Vietnam's role as a beacon of economic cooperation within ASEAN extends beyond trade; it also encompasses investment and strategic economic partnerships. The nation's pro-business environment and strategic location have made it a magnet for foreign direct investment (FDI) from ASEAN countries and beyond.

Vietnam's investment landscape is an alluring canvas for ASEAN nations seeking lucrative opportunities. The country's thriving manufacturing sector, fast-growing technology hubs, and dynamic consumer market captivate the interest of regional investors. In recent years, Vietnam has been a top choice for ASEAN nations looking to expand their footprint. For instance, Singapore has consistently ranked as one of the largest sources of FDI in Vietnam, with investments spanning various sectors, including manufacturing, real estate, and finance.

Moreover, Vietnam's position as a manufacturing and export hub in ASEAN has attracted significant investment from countries like Japan, South Korea, and Taiwan. These investments, often in high-tech sectors, contribute to Vietnam's economic diversification and bolster its status as a regional economic powerhouse.

Regional Economic Collaboration and Influence in ASEAN

Moreover, Vietnam actively participates in regional economic cooperation projects, fostering synergies for collective growth. The ASEAN Single Window (ASW), a digital platform aimed at expediting customs procedures and trade facilitation, is one such initiative. Vietnam's seamless integration into ASW exemplifies its commitment to enhancing economic cooperation and streamlining trade processes among ASEAN nations.

The nation's pivotal role in the Mekong Subregion, where it collaborates with Laos, Cambodia, Thailand, and Myanmar, amplifies its influence. Initiatives like the Greater Mekong Subregion Economic Cooperation Program (GMS) promote sustainable development and infrastructure connectivity, driving economic growth in the region.

In conclusion, Vietnam's active participation in investment and economic cooperation initiatives within ASEAN underpins the region's shared prosperity. The nation's welcoming investment climate, dynamic sectors, and strategic collaborations fortify its position as a key player in regional economic development. For ASEAN nations and investors, Vietnam remains an enticing destination, offering a strategic gateway to a vibrant and interconnected Southeast Asian market.

Intra-ASEAN trade thrives thanks to Vietnam's pivotal role in the region. With its strategic location and active participation in trade agreements and economic cooperation, Vietnam has become an essential hub for business within ASEAN. As the region's economies continue to grow, Vietnam's significance in facilitating trade and investments remains on an upward trajectory. For those eager to explore the vast opportunities presented by intra-ASEAN trade, Viettonkin is your trusted partner. With our expertise in navigating the dynamic landscape of trade and investments in Vietnam and the ASEAN region, we invite you to connect with us. Let Viettonkin be your gateway to success in this flourishing market.

In the ever-evolving landscape of electric vehicle manufacturing, BYD, a prominent Chinese automaker, has made its indelible mark. Known for its innovative electric vehicles (EVs), BYD's entry into Vietnam's dynamic EV market has set the stage for transformative changes. This article offers a deep dive into BYD's venture into Vietnam's EV manufacturing sector, exploring the profound implications of this strategic move. We unravel the impact of BYD's presence, providing invaluable insights for investors eyeing the burgeoning Vietnamese electric car market.

BYD's Entry into Vietnam’s EV market

The Rise of BYD in the Global EV Market

Founded in 1995, BYD Co. Ltd. (short for "Build Your Dreams") emerged as a new high-tech private enterprise headquartered in Shenzhen, China. The company embarked on its remarkable journey by listing on the Shenzhen Stock Exchange in 2002, initially focusing on rechargeable batteries, competing with imports from Japan.

Within a decade, BYD achieved a remarkable feat, capturing nearly half of the global phone battery market. It solidified its position as China's largest battery manufacturer and secured a place among the world's top four in all categories of rechargeable batteries.

In 2003, BYD expanded its horizons by acquiring Shaanxi Qinchuan Automobile Co., Ltd., laying the foundation for BYD Auto, one of its two primary operating segments. Headquartered in Xi'an, Shaanxi, BYD Auto set its sights on establishing a world-class automobile brand. Its Shanghai-based research and development (R&D) center boasts a dedicated automotive team of over 3,000 professionals, churning out more than 500 patents annually. During 2021, BYD Auto allocated around 10.6 billion RMB for R&D endeavors, focusing on groundbreaking technologies like "DM-i Super Hybrid," "Blade Battery," and "e Platform 3.0". This marked a notable surge of 24.2 percent when contrasted with the preceding year.

With production lines capable of manufacturing 200,000 vehicles in Xi'an and 300,000 vehicles in Shenzhen, BYD Auto further solidified its presence. Notably, BYD Auto's commitment to electric mobility shines through, with plans to produce around 1.86 million electric vehicles in 2022 - an astounding 211% increase compared to the previous year, securing its position as the world leader in electric vehicle production. While other major players like Tesla and Volkswagen follow closely, BYD's portfolio includes both Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs).

BYD's Strategic Expansion Plans in Vietnam’s EV Market

BYD's expansion plans extended beyond China's borders, as the company sought to open a plant in Vietnam for car parts production. The goal was to export components to an assembly plant planned in neighboring Thailand, marking a strategic move into Southeast Asia.

In a meeting between BYD's founder and chair, Wang Chuanfu, and Deputy Prime Minister Tran Hong Ha in May 2023, Wang expressed expectations for Vietnam to facilitate favorable conditions for BYD to complete its investment procedures. Additionally, BYD proposed the formation of a local supply chain, aiming to further integrate its operations within Vietnam's dynamic market.

Behind this strategic decision lies a multitude of reasons, including Vietnam's promising growth potential and strategic location. BYD's previous operations in Vietnam have witnessed impressive scale and scope, reflecting the company's commitment to contributing to the country's manufacturing industry.

BYD's journey into Vietnam represents a compelling case study of a global EV giant's strategic expansion into one of the fastest-growing EV markets in the world, offering valuable insights for investors and industry enthusiasts alike.

BYD's Impact on Vietnam's EV Industry

BYD's Technological Advancements in Vietnam's EV Sector

BYD's entry into Vietnam's electric vehicle (EV) industry has been nothing short of transformative, leaving an indelible mark on the sector. Its advanced technology and wealth of expertise have played a pivotal role in shaping the trajectory of EV development in the country.

One of the key contributions of BYD stems from its technological expertise. Leveraging its extensive research and development capabilities, BYD is poised to introduce cutting-edge EV solutions to the Vietnamese market. These innovations encompass various facets of EV manufacturing, spanning from battery technology to vehicle design and performance. Notably, BYD has previously filed for industrial design registrations for two hybrid models, BYD Destroyer 05 and BYD Cruiser 05, within Vietnam.

A noteworthy achievement linked to BYD is the unveiling of EV models that have garnered significant attention and gained popularity among Vietnamese consumers. These models, renowned for their quality, efficiency, and environmentally friendly attributes, have triggered a surge in interest and demand for electric vehicles across the nation.

Driving Collaborations and a Greener Vision

BYD's presence has paved the way for potential collaborations and partnerships within the Vietnamese EV ecosystem. These synergies have the potential not only to facilitate technology transfer but also to stimulate the growth of local suppliers and service providers, thereby fortifying the value chain of the EV industry.

One remarkable aspect of BYD's impact is the alignment of its vision with Vietnam's push for sustainable transportation solutions. With BYD's commitment to eco-friendly mobility, the Vietnamese market has witnessed the emergence of more environmentally conscious EV options, aligning with the nation's efforts to combat pollution and reduce carbon emissions.

In essence, BYD's influence extends beyond market share and sales figures. It symbolizes a commitment to driving change and innovation in Vietnam's EV manufacturing landscape. As the industry continues to evolve, BYD remains at the forefront, continually pushing the boundaries of what is possible in the world of electric mobility.

EV Market Growth and Future Prospects

Vietnam's EV Market Landscape

BYD's strategic plan to enter Vietnam's electric vehicle (EV) manufacturing sector has set the stage for potential growth and innovation. As the company prepares to invest in the market, it's worth examining the trajectory that positions BYD as a prominent player in the Vietnamese EV landscape.

In anticipation of its investment, BYD has showcased a keen understanding of the local dynamics, which is poised to enable the company to navigate challenges effectively. With a relentless focus on R&D and a robust manufacturing base, BYD's commitment to growth is evident. In contrast, Vietnam's EV industry is still in the process of maturing its R&D capabilities and establishing a strong manufacturing platform. This underscores the significance of BYD's planned investments and expertise.

Competing in the Vietnamese EV Market

When considering global market share, BYD is actively preparing to carve out a significant presence, challenging well-established American and German competitors. In the context of the Vietnamese market, Reuters indicates that VinFast is emerging as the primary rival for BYD, particularly in the realm of electric vehicles, with a focus on the mid-range segment valued between 100,000 and 300,000 RMB (equivalent to over 350 million to more than 1 billion VND). It's important to acknowledge that, although Vietnam's domestic manufacturers such as VinFast pose competitive forces, BYD's strategic positioning doesn't cast them as direct adversaries. Instead, VinFast represents formidable competitors that are propelling the entire industry forward.

BYD's Vision for the Future in Vietnam

BYD's intended role in shaping the future of Vietnam's EV industry cannot be overstated. Its unwavering commitment to sustainable transportation and technological advancements is expected to set new standards and catalyze innovation. This influence will likely extend to the broader industry, as other players seek to emulate BYD's success and commitment to green mobility.

Projections and forecasts suggest a bright future for BYD in Vietnam once its investments materialize. With plans for a factory in the country, the company aims to further strengthen its foothold in the global market, leveraging its manufacturing prowess and high R&D capacity. This expansion reflects the company's confidence in Vietnam's potential as a hub for EV production.

For investors eyeing Vietnam's EV manufacturing sector, there are valuable lessons to be gleaned from BYD's strategic approach. The importance of a well-rounded strategy, robust R&D, and a commitment to sustainable solutions cannot be understated. As the Vietnamese EV industry continues to evolve and BYD's investments come to fruition, BYD's journey will serve as a roadmap for success, highlighting the possibilities and opportunities that lie ahead.

BYD's strategic entry into Vietnam's electric vehicle (EV) manufacturing market signifies a game-changing development for the country's automotive industry. As a global leader in electric vehicle technology, BYD brings its rich legacy of innovation to contribute significantly to the growth of Vietnam's EV sector. This investment highlights Vietnam's growing importance as a hub for electric car production and reinforces its position in the global electric vehicle market. For businesses and investors eager to seize the opportunities in Vietnam's dynamic electric vehicle manufacturing landscape, Viettonkin stands ready as your strategic ally. Our deep industry knowledge, invaluable market insights, and dedicated support will navigate you through the complexities of investing in Vietnam's thriving electric vehicle industry. Contact Viettonkin today to embark on your journey toward a sustainable and prosperous future in the electric vehicle manufacturing sector.

In the global context of electric vehicle (EV) manufacturing, Vietnam's role is rapidly gaining prominence. As foreign investors seek opportunities in sustainable transportation, Vietnam's EV market stands as a beacon of promise. This article serves as a comprehensive guide for these investors, elucidating the abundant prospects and incentives within Vietnam's electric vehicle manufacturing landscape. Against the backdrop of an evolving EV market, the Vietnamese sector's growth trajectory presents a compelling case for investment. Join us in exploring Vietnam's dynamic EV companies, market trends, government policies, and the wealth of opportunities it offers to savvy investors looking to capitalize on the electric mobility revolution.

Overview of Vietnam's EV Manufacturing

Private Enterprises Driving Vietnam's EV Revolution

Vietnam's EV manufacturing sector is in its nascent stages, yet it holds immense promise for substantial growth. The Vietnamese government has set ambitious targets, aiming for electric vehicles (EVs) to constitute 10% of all new vehicles sold in the country by 2030. Forecasts paint a compelling picture of this burgeoning market, with projections suggesting that by 2028, Vietnam could boast one million electric cars, a number expected to surge to 3.5 million by 2040.

Private enterprises have been the primary force propelling the transformation of Vietnam's electric vehicle (EV) market. While the market's early emphasis was on electric scooters, dedicated initiatives from the private sector have accelerated Vietnam's rise to prominence in the EV industry. Significantly, Vietnam achieved the distinction of becoming the inaugural Southeast Asian nation to establish its electric car manufacturing company, positioning itself as a potential regional disruptor, and even rivaling China's dominant role.

Surging Growth in Electric Two-Wheelers (E2W)

The increasing market share of E2W has further accelerated the transition towards electrification in Vietnam. The E2W market share surged from 5.14% in 2019 to 8.54% in 2020 and reached 10% in 2021. Transitioning from traditional two-wheelers to their electric counterparts is relatively straightforward due to component similarities and high local production rates. Vietnam boasts seven E2W manufacturers, with six being Vietnamese companies, including VinFast, Pega, Anbico, Detech, DK Bike, and Datbike.

Major Players in Vietnam's EV Landscape

Leading the charge, VinFast, a subsidiary of VinGroup, has emerged as a prominent domestic EV manufacturer in Vietnam. In 2021, VinFast made waves by launching two electric car models, VF e35 and VF e36, at the 2021 Los Angeles Auto Show. Furthermore, VinGroup established VinBus, which operates e-buses in multiple Vietnamese cities. With ambitious production targets, VinFast aims to manufacture 20,000 electric cars and approximately 1,500 buses by 2022.

Vietnam's EV market has attracted a lot of major players such as Wuling HongGuang, Skoda and Hyundai. Many of these companies have already introduced or have plans to launch new products in Vietnam in 2022. For instance, KIA introduced the KIA EV6 to the Vietnamese market in mid-2021, with plans for sales starting in 2022.

The number of EVs in Vietnam has witnessed rapid growth in recent years. From a mere 167 vehicles in 2018, the count surged to nearly 12,600 by July 2023. However, the majority of these vehicles consist of passenger cars and city buses, showcasing the diverse potential for further expansion in various segments of the EV market.

Opportunities for Foreign Investors in EV Manufacturing

Opportunities for foreign investors in Vietnam's electric vehicle (EV) manufacturing sector extend far beyond the promising market landscape. Several factors make Vietnam an attractive investment destination in this rapidly evolving industry.

Explosive Demand: As per the International Trade Administration, Vietnam stands out with an extraordinary growth potential due to surging demand. With more than 60% of its population owning motorcycles and a car ownership rate of only 5.7% in 2020, Vietnam presents a unique growth opportunity. Forecasts indicate that car ownership could surge to 30% by 2030, representing a remarkable 10.5% annual growth rate. This growing demand for passenger vehicles is unparalleled in many Asian markets.

Rising Middle Class: Vietnam's young and expanding middle class exhibits a strong inclination towards cutting-edge technologies, fuel efficiency, and environmental consciousness. This demographic alignment positions the country for double-digit growth in the EV market. The middle class's increasing purchasing power and environmental awareness create a receptive audience for EV adoption.

Environmental Imperatives: Urban centers in Vietnam, such as Hanoi and Ho Chi Minh City, grapple with air pollution and traffic congestion due to the prevalence of gas-powered motorbikes and ride-sharing fleets. To address this issue, the government aims to gradually restrict motorbikes on city streets by 2030 in major urban centers, opening the way for EVs' adoption. Vietnam's commitment to achieving net-zero carbon emissions by 2050 further emphasizes the importance of transitioning to green energy and electric vehicles.

Government Support: The Vietnamese government is actively promoting green energy transformation and emissions reduction in the transport sector. An action program has been approved to encourage the production, assembly, import, and use of electric road vehicles, along with the development of charging infrastructure. By 2050, the goal is to convert all road motorized vehicles to electricity and green energy, making EVs an integral part of the country's sustainable transportation future.

Skilled Workforce: Vietnam boasts a young and educated workforce, well-versed in both traditional manufacturing and the evolving EV industry. This skilled labor pool facilitates efficient production processes and innovation within the sector.

Strategic Location: Situated at the heart of Southeast Asia, Vietnam offers strategic access to regional markets. Its proximity to economic powerhouses like China and the ASEAN region enhances the potential for market expansion, making it an ideal manufacturing hub for EVs.

Export Opportunities: Vietnam's advantageous geographical location, coupled with trade agreements, positions it as a launchpad for international expansion. EV manufacturers can leverage Vietnam to access markets in Southeast Asia and beyond, aligning with global trends favoring sustainable transportation.

Foreign investors have already witnessed success in Vietnam's EV sector, exemplified by VinFast, a domestic manufacturer with international investments. VinFast's achievements, including electric car and bus production, underscore the tangible opportunities and potential returns in the Vietnamese market. As the nation accelerates its transition to electric mobility, foreign investors stand to benefit from a dynamic and promising industry landscape.

Incentives and Government Support for EV Manufacturing

Vietnam's electric vehicle (EV) industry is still in the early stages of policy development and incentives. While explicit frameworks are lacking, the government has taken notable steps to promote EVs as part of its sustainable development plan. These efforts are aligned with four key areas: sustainable development, green growth, climate change, and environmental protection laws.

One significant policy document, Resolution 55/NQ/TW, issued in February 2020, marks a pivotal moment. It outlines the National Energy Development Strategy until 2030, with a Vision to 2045, emphasizing the promotion of e-mobility and energy storage in line with global trends.

Decision 1095/QĐ-BGTVT, dated June 17, 2021, focuses on building the National Transportation Vehicle Development Strategy. This strategy aims to develop environmentally friendly vehicles and is set to be implemented during 2022-2023 by the Transport Development and Strategy Institute.

Vietnam's commitment to sustainability is further underscored by its acceptance of the Paris Agreement in July 2020. The updated Nationally Determined Contribution (NDC) includes a pledge to reduce greenhouse gas emissions by 15.8% in 2030. EV adoption plays a vital role in achieving these emissions reductions. In January 2022, Ho Chi Minh City initiated studies on e-transportation development, signaling the intent to integrate e-vehicles in the southern hub.

Decision No. 1393/QĐ-TTg from 2012 laid the groundwork for the National Green Growth Strategy (NGGS). The Ministry of Planning and Investment is currently formulating a new NGGS for 2021-2030, with a focus on vehicle electrification. Several provincial Green Growth Action Plans also encompass transportation and electrification goals.

Local strategies, such as Hanoi's Green Growth Strategy and Nha Trang's Green Growth Strategy, set ambitious targets for e-motorcycles and e-buses, reflecting growing interest in EVs at the city level.

Moreover, the National Automobile Development Strategy (2021-2050), proposed by the Vietnam Automobile Manufacturers Association (VAMA), aims to stimulate manufacturing and significantly increase the use of e-vehicles. The plan envisions a production capacity of 3.5 million electric vehicles by 2040.

In recent developments, the government has issued new decisions, including Decree 10/2022, effective from March 1, 2022, which grants exemptions from registration fees for Battery Electric Vehicles for the first three years and a 50% reduction for the subsequent two years. Law no. 03/2022/QH15, also effective from March 1, 2022, has reduced the excise tax rate for battery electric vehicles to a range of 1-3% for five years.

While these steps are promising, the government recognizes the need for stronger incentives and support policies for both local and foreign-invested EV manufacturers. Efforts to expand the charging station network and incentivize EV consumers further underscore Vietnam's commitment to fostering a vibrant EV industry and advancing sustainability goals.

Final Thoughts

In conclusion, Vietnam's electric vehicle manufacturing sector offers an enticing landscape for foreign investors eyeing the EV market. With an expanding middle class, rapid urbanization, and growing environmental consciousness, Vietnam is on the cusp of a significant shift in the electronic vehicle market. The government's supportive policies and incentives for EV companies underscore the nation's commitment to sustainable transportation. As Vietnam charges ahead on its path to becoming a key player in the global electric vehicle manufacturers arena, foreign investors can't afford to overlook this thriving opportunity. To embark on your journey in Vietnam's electric vehicle manufacturing sector, Viettonkin stands ready as your trusted partner. Contact us today to harness the potential of this vibrant market for electric vehicle companies.

In an era marked by a profound shift towards sustainable transportation solutions, the electric vehicle (EV) has emerged as a key player in driving the future of mobility. With both Vietnam and China making significant strides in this transformative industry, it's essential to understand the dynamics at play in these two nations. As the world's largest automotive market, China has been a trailblazer in EV technology and adoption, while Vietnam, with its rapidly growing economy, holds immense potential for electric mobility. In this article, we will conduct a comparative analysis of Vietnam's and China's EV markets, exploring their technological innovations, market growth, policy frameworks, and more. Our aim is to provide insights into the unique opportunities and challenges these markets present and shed light on their growing importance in the global electric mobility landscape.

Electric Vehicle Technology and Innovation

China's Dominance in EV Innovation

When it comes to technology and innovation in the electric vehicle (EV) sector, China has undoubtedly emerged as the world's trailblazer. Its leadership extends across a spectrum of EV domains, including autonomous vehicles, rail EVs, and electric motorcycles. The foundation for China's prowess in the EV industry can be traced back to early investments in mining and battery production, which gave it a substantial advantage over other nations.

One area where China has been particularly influential is in the development of alternative battery technologies. The country has actively explored options beyond conventional lithium-ion batteries. Notably, the lithium-iron-phosphate (LFP) chemistry has gained widespread popularity, with an astonishing 95% of LFP batteries for electric light-duty vehicles (LDVs) being deployed in Chinese-manufactured vehicles. This commitment to innovative battery solutions has solidified China's global leadership.

China's technological advances also extend to two-wheel EVs, where the adoption of smart features has been remarkable. Electric motorcycles and scooters now boast IoT connectivity, GPS tracking, diverse unlocking mechanisms, AI-driven battery management, and real-time updates. These advancements have transformed the landscape of electric two-wheelers, further cementing China's position as a technological trendsetter.

Vietnam's Growing Presence in the EV Market

While China has established itself as a powerhouse in the EV realm, Vietnam's EV market is in its nascent stages but holds immense growth potential. Initially focused on electric scooters, Vietnam has taken determined strides to become a significant player in the industry. The nation achieved a remarkable milestone by becoming the first in Southeast Asia to successfully establish its electric car manufacturing company.

In the realm of electric two-wheelers, Vietnam's progress is particularly noteworthy. Electric motorcycles and scooters have captured a substantial 10% of the two-wheeler market in 2021, with nearly 1.8 million units in operation. This remarkable feat positions Vietnam as the second-largest market for two-wheeler electrification globally, following closely behind China. Homegrown companies like VinFast and Pega dominate the electric two-wheeler landscape.

In the electric four-wheeler segment, Vietnam has experienced a significant uptick. As of August 2022, nearly 3,000 electric cars were produced, assembled, or imported, reflecting substantial growth since 2019. VinFast spearheads the domestic electric car market, with foreign companies also entering the fray, supported by government initiatives. The transition to EVs holds promise in reducing the transport sector's greenhouse gas emissions, aligning with clean and renewable energy sources.

Both China and Vietnam have recognized the importance of collaborative efforts in driving EV innovation. China's collaborations span the globe, with partnerships established with industry giants like Tesla and BMW, leveraging their expertise to propel EV technology further. Vietnam, on the other hand, actively seeks international collaborations to accelerate its technological advancements, frequently partnering with global automakers and technology firms. As the EV landscape continues to evolve, these collaborative endeavors are pivotal in shaping the technological future of both nations.

Electric Vehicle Market Growth and Potential

The Pinnacle of the Chinese EV Market

In the realm of electric vehicles (EVs), China stands as a beacon of unprecedented growth and dominance. The Chinese EV market is poised for exponential expansion, with its estimated revenue reaching a staggering US$292.1 billion in 2023. This surge is underpinned by China's resolute commitment to clean energy initiatives and unwavering government support. Projections paint a compelling picture, with the market expected to experience a robust compound annual growth rate (CAGR) of 6.38% from 2023 to 2028.

China's aspiration to become a global leader in EV production is well within reach, with forecasts suggesting that by the close of 2035, an astounding 50% of all car sales in the country could be EVs, marking a historic milestone for the world's largest automobile market. The Chinese EV landscape is teeming with vibrancy and competition, boasting over 94 brands offering an extensive array of more than 300 EV models across various price segments. Homegrown giants like BYD, Wuling, Chery, Changan, and GAC command a formidable 81% market share as of 2022. Furthermore, a thriving ecosystem of innovative EV start-ups, including Nio, Xpeng, Neta, AITO, IM Motors, Zeeker, Aiways, and Livan, adds to the market's dynamism, propelling China's supremacy in the realm of EV production.

The Blossoming Prospects of Vietnam's EV Market

Meanwhile, in Vietnam, a nation of nearly 100 million people, the outlook for electric vehicle development is exceptionally promising. Factors such as a relatively low car ownership rate within the region, steady GDP growth, a burgeoning middle class, and rapid technological advancements converge to position Vietnam as a prime market for future EV growth. Projections indicate a remarkable surge in EV adoption, with estimates suggesting that the number of EVs could skyrocket from 8,364 in 2022 to an impressive 64,497 by 2032. This transition would account for a significant share, surging from 2.9% to 13.6% of the total vehicles in the market.

Within the Vietnamese EV landscape, the two-wheel electric vehicle segment is expected to retain its dominance, given the nation's substantial ownership of motorbikes. This sector experienced robust growth, with approximately two million units sold in the previous year. Additionally, the number of charging points in Vietnam is set to undergo a remarkable transformation, projected to surge from fewer than 27,000 in 2023 to a staggering 390,000 by 2032. While VinFast currently holds a commanding position in the market, new entrants are gearing up to make their mark. For instance, Foxconn's commitment to invest $200 million in a factory for manufacturing and assembling electronic components, chargers, and charger controllers for electric vehicles is a testament to Vietnam's growing allure as a hub for EV innovation and production.

Electric Vehicle Policy and Regulatory Framework

In the realm of electric vehicles (EVs), policy frameworks wield immense influence, shaping the trajectories of China and Vietnam on their respective journeys toward sustainable mobility.

China's Pioneering EV Policy Landscape

China stands as a global benchmark for EV policy dynamism. With its visionary "New Energy Vehicle Industry Development Plan (2021-2035)", unveiled in November 2020, China signaled its unwavering commitment to a green automotive future, aligning with the dual-carbon target. A groundbreaking move on June 21, 2023, saw China announcing a colossal tax incentive package of 520 billion yuan (US$72.3 billion) spanning four years. This unprecedented initiative aims to invigorate the EV and environmentally friendly vehicle segments, marking a historic boost for the automotive sector. Beyond national measures, several regions, including Shenzhen and Shanghai, have introduced local initiatives to fortify the EV supply chain and foster industry growth. In terms of geographical distribution, China mirrors the traditional auto sector with key clusters in Beijing-Tianjin-Hebei, the Yangtze River Delta, the Pearl River Delta, and the central region, signifying a synchronized industry landscape.

Vietnam's Emerging EV Policy Framework

Meanwhile, Vietnam is setting its own course within the EV policy landscape. Guided by the "Automobile Industry Development Strategy to 2025, Vision to 2035," the nation prioritizes the production of eco-friendly vehicles, including electric cars. It aligns with stringent emission standards and envisions automotive industry development in tandem with robust transport infrastructure. Vietnam’s incentive package for electric cars is particularly compelling, offering a three-year 0% registration fee for battery electric vehicles since March 1, 2022. Over the subsequent two years, the fee is set at just 50% of the rate applicable to gasoline-powered counterparts. Furthermore, the special consumption tax rate for battery electric cars has seen a substantial reduction, hovering between 1-3% until February 2027, providing a propitious springboard for EV market expansion.

Final Thoughts

In the ever-evolving landscape of electric vehicles, Vietnam's EV market and China's EV market present distinctive journeys. China's resolute policy initiatives have propelled it to the forefront of the global electric vehicle industry, setting impressive growth milestones. Meanwhile, Vietnam's electric vehicle market holds promise, with strategic incentives driving its ascent. Understanding these unique approaches is crucial in navigating the road to sustainable mobility. At Viettonkin, we serve as your strategic partner, bridging the gap for businesses and investors eager to explore the opportunities in Vietnam's EV market and China's EV market. Contact us today for expert insights and tailored support in this exciting journey where innovation meets opportunity.

The electric vehicle (EV) manufacturing industry in Vietnam is gaining prominence as the world embraces a profound shift toward electric mobility. Vietnam stands at the forefront of this transformation, poised to play a pivotal role in the global EV landscape. In the following sections, we will examine the current state of EV manufacturing in Vietnam, explore its remarkable growth potential and the opportunities it presents, and delve into the challenges faced by the industry. Our aim is to provide valuable insights into the landscape of electric vehicle manufacturing in Vietnam, offering key takeaways for readers interested in this exciting industry.

The Current State of Electric Vehicle Manufacturing in Vietnam

Government-Led Transition to Green Mobility

In recent years, Vietnam has been on an accelerated journey toward the development of its electric vehicle (EV) manufacturing sector. The government's commitment to net-zero emissions by 2050 has catalyzed this transformation. Policies and guidelines have been established to encourage the growth of low- and zero-emission transport options, aligning Vietnam with the global trend of sustainable mobility.

Rising Consumer Embrace of Eco-Friendly Transport

Many experts posit that the Vietnamese population is progressively embracing eco-friendly vehicles. In the coming years, as transportation infrastructure and electric EV charging infrastructure become more prevalent, local consumers are expected to increasingly opt for EV. Vietnam's expanding middle class, predominantly residing in urban centers, aligns with the objectives of smart cities, making green vehicles an appealing choice for those looking to contribute to environmental preservation by reducing pollution.

Projections and Current Landscape of Electric Vehicle Manufacturing in Vietnam

The Vietnam Automobile Manufacturers Association (VAMA) projects a bright future for the nation's electric vehicle landscape. Their forecast anticipates Vietnam reaching one million electrified vehicles by 2028, with an ambitious goal of 3.5 million electric vehicles on the road by 2040.

Currently, local EV manufacturing is spearheaded by two automakers, TMT Motor and VinFast. VinFast, a subsidiary of Vingroup, has invested significantly in its Haiphong complex, boasting cutting-edge, highly automated production lines capable of manufacturing up to 250,000 units annually, with plans for expansion to 950,000 units per year by 2026. In February, TMT Motor joined forces with a General Motors and SAIC-Wuling joint venture to produce and distribute Wuling-brand electric vehicles in Vietnam.

Additionally, the Vietnamese market has attracted attention from prominent Chinese EV manufacturers like Chery, BYD, Nio, and Xpeng. These companies are exploring partnerships with domestic entities to establish local EV production facilities. These developments collectively showcase Vietnam's growing prominence in the global electric vehicle manufacturing landscape.

Growth Potential and Opportunities in the Vietnamese Electric Vehicle Manufacturing Industry

Unprecedented Growth in Vietnam's Automobile Market

The automobile market in Vietnam is experiencing remarkable growth, with approximately 22 cars for every 1000 people in the country. This surge in demand is underscored by statistics indicating that over 50 percent of Vietnamese individuals expressed a desire to acquire a new car in 2022. However, this rapid growth has not come without challenges, particularly concerning environmental sustainability. Transportation stands as the leading contributor to greenhouse gas emissions in Vietnam, accounting for a substantial 19.3 percent of annual emissions. Moreover, concerning air quality, Vietnam ranked 36th globally for air pollution, with PM2.5 fine dust levels exceeding WHO recommendations by 4.9 times. In response to these environmental concerns and growing health burdens, Vietnamese consumers are actively seeking eco-friendly transportation alternatives. 

Governmental Support and Tax Incentives for Electric Vehicles

In line with these environmental concerns, the Vietnamese government's Decision No. 950/QD-TTg, which approved the Scheme for the development of smart sustainable cities in Vietnam, emphasizes the significance of environmentally responsible solutions. Electric vehicles (EVs) are notably favored due to their alignment with technological and environmental standards.

To further support this growth, the Ministry of Finance introduced a tax incentive program for the automobile supporting industry in 2020. Enterprises involved in manufacturing, processing, and assembly of auto components and spare parts have enjoyed import tax exemptions on raw materials and supplies for production. This policy is set to continue until 2027, fostering a favorable environment for EV manufacturing.

Additionally, legislative amendments have significantly reduced taxes on electric cars. A notable change came in January 2022 when the 15th National Assembly approved Law No. 03/2022/QH15, reducing excise tax rates for electric cars to 1-3% (applied from March 1, 2022, to February 28, 2027) and 4-11% (applied from March 1, 2027).

Furthermore, Decree No. 10/2022/ND-CP, issued by the government, introduces a 0% registration fee for battery electric cars registered within three years of March 1, 2022. Over the subsequent two years, this fee will equal 50% of the fee applied to petrol and diesel cars with the same seating capacity. For vehicles undergoing re-registration, a 2% registration fee is applicable, irrespective of whether they are electric or internal combustion engine vehicles.

Challenges and Considerations in Electric Vehicle Manufacturing

Policy Initiatives and Subsidies for Electric Vehicle Adoption

The Vietnamese electric vehicle (EV) manufacturing industry, while promising, faces several key challenges. One of the most critical areas of concern is the relative modesty of government policies in comparison to those implemented by countries in Southeast Asia and worldwide. While Vietnam has initiated policies aimed at supporting EV adoption, experts emphasize that a more substantial and immediate impact can be achieved through robust subsidy policies. This approach includes subsidies for both manufacturers and buyers of electric vehicles. Successful implementation of such policies has been witnessed in countries like the United States, the European Union, and even in Southeast Asian nations like Thailand.

Investment and Infrastructure Barriers

A significant hurdle in Vietnam's electric vehicle development landscape is the scarcity of supporting policies related to credit, investment, and trade for businesses operating in this sector. Unlike some other countries, Vietnam has not yet introduced comprehensive measures to encourage and facilitate investments in EV manufacturing. Electric vehicle projects typically demand substantial and long-term capital resources, which presents challenges in securing financial support from banks and other financial institutions.

Infrastructure development, including charging stations and battery recycling facilities, also poses a considerable challenge for the Vietnamese EV industry. The expansion of these essential components is vital for widespread EV adoption. Furthermore, building a robust supply chain for EV components and batteries is crucial to ensuring a consistent and cost-effective production process.

Workforce Development and Sustainable Electric Vehicle Manufacturing

Workforce training is another area that demands attention. With the growing demand for skilled professionals in EV manufacturing, there is a need for tailored training programs and educational initiatives to equip the workforce with the necessary skills and knowledge.

Sustainable and eco-friendly manufacturing practices represent a fundamental consideration in the EV industry. As the world increasingly gravitates toward environmentally responsible production methods, it is imperative that Vietnam's EV manufacturers adhere to stringent sustainability standards. This includes minimizing the environmental impact of production processes and the materials used.

Regulatory frameworks and safety standards are pivotal in ensuring the quality and safety of electric vehicles. Clear and comprehensive regulations are required to guide manufacturers in meeting safety and quality benchmarks. Compliance with international standards will not only enhance the reputation of Vietnamese EVs but also facilitate export opportunities.

Final Thoughts

The landscape of electric vehicle manufacturing in Vietnam holds immense promise, driven by growing consumer interest, supportive policies, and a commitment to sustainability. As Vietnam aims to play a pivotal role in the global transition to electric mobility, it is crucial to recognize the challenges and opportunities inherent in this journey. To thrive in this evolving industry, businesses and investors require expert guidance and strategic partnerships. Viettonkin stands as a trusted ally, offering valuable insights and support to navigate the dynamic landscape of electric vehicle manufacturing in Vietnam. Reach out to Viettonkin today to embark on this exciting journey towards a sustainable and electrifying future.

ASEAN Economic Integration, a dynamic and transformative process, is reshaping the economic landscape of Southeast Asia. At its core, this integration represents the commitment of the Association of Southeast Asian Nations (ASEAN) member countries to foster closer collaboration and integration in various sectors, including trade, investment, and finance. The primary aim is to create a unified and seamless economic region. In this article, we'll delve into the details of ASEAN Economic Integration, exploring its historical context, goals, and the pivotal role of intra-ASEAN trade in shaping the region's economies.

Understanding ASEAN Economic Integration

A History of ASEAN Economic Integration

The journey of ASEAN towards economic integration is rooted in its historical context. Since its establishment in 1967, ASEAN has progressively evolved from a region characterized by political and security cooperation to one focused on economic collaboration. A notable milestone was the signing of the ASEAN Free Trade Area (AFTA) agreement in 1992, which aimed to reduce tariffs and promote trade among member countries. This commitment to economic integration laid the foundation for the more comprehensive ASEAN Economic Community (AEC) launched in 2015.

The Pillars of ASEAN Economic Integration

At the core of ASEAN's economic integration efforts lies the ASEAN Economic Community (AEC). This ambitious initiative aims to create a single market and production base across ASEAN member countries. It envisions a region where goods, services, investments, and skilled labor can move seamlessly. The AEC is one of three pillars of ASEAN, complemented by the ASEAN Political-Security Community and the ASEAN Socio-Cultural Community. This multi-dimensional approach reflects ASEAN's commitment to fostering not just economic but also political and social cooperation.

Synergistic Efforts and Collaboration within ASEAN Economic Region

The success of ASEAN Economic Integration hinges on the principles of cooperation and collaboration. ASEAN operates on a consensus-building model, wherein decisions are made collectively and every member's opinion is valued. This approach, coupled with the principle of non-interference in each other's internal affairs, creates an environment of trust and mutual respect. As a result, member countries can work together effectively, even when addressing complex issues.

ASEAN Economic Integration in Numbers

Statistics and research demonstrate the progress of ASEAN Economic Integration. Intra-ASEAN trade has seen substantial growth, with the volume of trade among member countries steadily increasing. According to a report by the ASEAN Secretariat, intra-ASEAN trade accounted for around 23% of total ASEAN trade in 2019, highlighting its importance in the region's economic landscape. Moreover, foreign direct investment (FDI) flows into ASEAN have surged, reflecting growing investor confidence. A study by the United Nations Conference on Trade and Development (UNCTAD) noted that ASEAN was the second-largest recipient of FDI in developing regions in 2021.

Goals and Objectives of ASEAN Economic Integration

Establishing a Unified Market and Production Base in ASEAN

One of the central goals of ASEAN Economic Integration is to establish a single market and production base. This ambitious aim has its roots in the ASEAN Free Trade Area (AFTA), which, through years of negotiations and agreements, has significantly reduced tariffs on intra-ASEAN trade. As a result, businesses across member countries can now access a larger consumer base with fewer restrictions. This has led to increased efficiency, economies of scale, and a tangible boost in regional trade. A study by the Asian Development Bank (ADB) found that the average applied tariff rate for ASEAN countries fell from 3.11% in 2005 to 0.20% in 2017, showcasing the concrete progress made in this regard.

Stimulating Economic Growth and Ensuring Stability in the Region

Another key objective is to promote economic growth and stability in the region. The ASEAN Economic Community (AEC) envisions a region where there is equitable economic development, thus reducing income disparities among member countries. The aim is not just economic growth but inclusive growth that benefits all citizens. For example, Vietnam's rapid economic growth, partly attributed to its participation in ASEAN Economic Integration, has resulted in poverty reduction. According to the World Bank, the poverty rate in Vietnam dropped from nearly 60% in the early 1990s to 5% by 2020, indicating the positive impact of economic integration on the well-being of the population.

Boosting Regional Competitiveness through ASEAN Economic Integration

ASEAN strives to enhance its regional competitiveness on the global stage. By integrating their economies and collaborating, member countries can compete more effectively with other global economic powerhouses. Initiatives like the ASEAN Investment Area (AIA), the ASEAN Single Window (ASW), and the ASEAN Comprehensive Investment Agreement (ACIA) contribute to streamlining investment processes, reducing trade costs, and promoting transparency and protection for investors. This attracts foreign direct investment (FDI) and fosters innovation. A case in point is Singapore, which has consistently ranked highly in the World Bank's Ease of Doing Business Index. Its success as a regional hub for businesses and investments illustrates the benefits of such initiatives.

Aligning Objectives with Broader Regional Aspirations

The goals and objectives of ASEAN Economic Integration align with the broader aspirations of ASEAN countries, which encompass political stability, social progress, and regional peace. Economic integration is seen as a means to achieve these ends. By fostering economic interdependence, member countries are incentivized to maintain peaceful relations and collaborate on shared challenges, such as climate change and disaster management. A notable example is the ASEAN Plus Three (China, Japan, and South Korea) cooperation in disaster management, where nations work together to mitigate the impact of natural disasters. These initiatives not only enhance regional stability but also reinforce ASEAN's role on the global stage, making it a formidable force in addressing common challenges.

The Significance of Intra-ASEAN Trade

Intra-ASEAN trade is at the heart of ASEAN Economic Integration, and its significance cannot be overstated. It plays a pivotal role in fostering regional development, enhancing economic growth, and creating opportunities for businesses.

Driving Regional Progress through Intra-ASEAN Trade

Intra-ASEAN trade has been instrumental in driving regional development. As member countries increasingly trade with one another, economic activity flourishes, leading to infrastructural advancements and job creation. For instance, the Greater Mekong Subregion (GMS) Economic Cooperation Program, involving several ASEAN countries, has seen substantial investments in transportation networks, energy infrastructure, and trade facilitation projects. These developments improve connectivity and pave the way for further economic integration.

Streamlining Trade via Comprehensive Integration Measures

The integration of ASEAN economies has led to a reduction in trade barriers and an increase in the flow of goods and services among member states. The ASEAN Free Trade Area (AFTA) and the elimination of tariffs on thousands of products have incentivized trade within the region. This has made it easier for businesses to access neighboring markets, boosting export opportunities.

Advantages for Enterprises in the ASEAN Economic Partnership

Businesses within ASEAN member states reap significant benefits from intra-ASEAN trade. With access to a larger consumer market, companies can expand their customer base and scale up operations. Reduced trade barriers, simplified customs procedures, and harmonized standards make it cost-effective for businesses to engage in cross-border trade. For instance, the ASEAN Single Window (ASW) streamlines customs clearance processes, reducing delays and costs for exporters and importers. This favorable business environment has attracted foreign investment and encouraged the establishment of regional supply chains.

Real-World Cases: Exploring the Significance of Intra-ASEAN Trade

Several real-world examples illustrate the success of intra-ASEAN trade. The automotive industry, for instance, has seen extensive intra-ASEAN trade in vehicle components and finished automobiles. Companies like Toyota have established regional production hubs, taking advantage of the integrated supply chain. Additionally, the ASEAN Banking Integration Framework (ABIF) has enabled financial institutions to expand their operations seamlessly across ASEAN countries. This has led to greater financial inclusion and access to banking services for the region's population.

The journey of ASEAN Economic Integration has been nothing short of remarkable. This concerted effort among Southeast Asian nations to foster stronger economic ties and shared prosperity has led to the removal of trade barriers, the harmonization of standards, and the creation of a vibrant regional marketplace. At the heart of this integration lies the crucial role of intra-ASEAN trade, serving as the lifeblood that fuels progress.

We extend an invitation to connect with Viettonkin, where our extensive knowledge of the ASEAN economic partnership can be your strategic advantage. Whether you represent a well-established corporation or an emerging entrepreneur, our tailor-made solutions and comprehensive services are designed to navigate the intricate terrain of this dynamic region. Embark on a journey of growth and exploration with Viettonkin by your side. Contact us today to unlock the full potential of ASEAN Economic Integration.

In the fast-paced and dynamic business environment of Vietnam, having an efficient and well-structured HR system is more critical than ever. As companies expand their operations and compete for top talent in this thriving market, the need to set up a human resource system in Vietnam that aligns with local regulations and international standards has become paramount.

Vietnam's business landscape is evolving, with increased globalization, a younger and tech-savvy workforce, and changing labor laws. Navigating this complexity while ensuring compliance and optimizing HR processes can be challenging. That's where the expertise of HR system setup comes into play.

Understanding the Challenges and Solutions for HR System Setup in Vietnam

Vietnam's thriving business environment presents numerous opportunities for growth and expansion. However, it also brings forth several challenges that necessitate a robust HR system. Here, we explore the significance of setting up a human resource system in Vietnam and the challenges that businesses encounter in this context.

Regulatory and Compliance Challenges

Navigating Vietnam's intricate labor laws and compliance requirements can be daunting for both local and foreign businesses. The country's legal framework is constantly evolving, and staying updated is crucial to avoid legal complications. Establishing an HR system that ensures compliance with local regulations while adhering to international standards is imperative for long-term success.

Vietnam's labor laws encompass a wide range of aspects, including employment contracts, working hours, minimum wages, social insurance, and taxation. Staying compliant with these regulations is essential to avoid penalties and disputes that can negatively impact business operations.

Talent Acquisition and Retention in Vietnam

Vietnam boasts a young and dynamic workforce, but the competition for top talent is fierce. Effective talent acquisition and retention strategies are vital for businesses aiming to secure the best professionals. An adept HR system can streamline recruitment processes, identify suitable candidates, and implement employee retention programs to keep valuable talent within the organization.

In a highly competitive job market, companies need to differentiate themselves to attract and retain skilled employees. Offering competitive salary packages, professional development opportunities, and a positive workplace culture are essential components of a successful talent retention strategy.

Adapting to Cultural Differences

Vietnam's rich cultural diversity is a hallmark of its society, and this extends to the workplace. Businesses must be sensitive to cultural nuances and adapt their HR practices accordingly. An HR system that integrates cultural awareness and inclusivity fosters a harmonious work environment and enhances employee morale and productivity.

Understanding Vietnamese cultural norms, communication styles, and social hierarchies is crucial for effective HR management. Moreover, recognizing and celebrating cultural festivals and holidays can contribute to a more cohesive and engaged workforce.

Key Components of an HR System in Vietnam

To establish an efficient HR system in Vietnam, businesses need to focus on key components that contribute to effective human resource management.

Recruitment and Onboarding

Recruitment and onboarding are pivotal processes for businesses in Vietnam, where the competition for top talent is fierce. In a dynamic job market, attracting the right candidates requires a well-structured approach. HR system setup services play a vital role in this phase by providing the technological infrastructure needed for efficient recruitment.

These services assist in posting job vacancies on various platforms, including online job boards and social media. They also offer Applicant Tracking Systems (ATS) that help businesses manage candidate applications, schedule interviews, and perform background checks. Moreover, they can provide data-driven insights into the most effective recruitment channels and strategies, helping companies optimize their hiring processes.

Once candidates are selected, a seamless onboarding process is essential. HR systems offer tools to streamline the onboarding experience, including digital document management for contracts and employee handbooks. This ensures that new hires receive all necessary information and complete essential forms promptly.

Payroll and Benefits Management

Payroll and benefits management require precision and compliance with Vietnamese labor regulations. The Vietnamese government has established a number of labor regulations that govern minimum wage requirements, working hours, and benefits for workers in Vietnam. These regulations are designed to protect the rights of workers and to ensure that they are treated fairly. 

Minimum wage requirements, working hours, and benefits are all important factors that should be included in company regulations which are the rules and procedures that govern the workplace. They are typically set by the employer and are designed to ensure that the workplace is safe and productive.

By including these factors in company regulations, employers can ensure that they are complying with the law and that they are providing their employees with the benefits they are entitled to.

Minimum wage requirements

The minimum wage in Vietnam is set by the government and varies by region. The following are the minimum wage requirements from July 01, 2022:

• Ho Chi Minh City and Hanoi: 4,68 million dong (around $192) per month
• Da Nang: 4.16 million dong (around $170) per month
• Other regions: 3.25-3.64million dong (around $133-$150) per month

The minimum wage is reviewed and adjusted on an annual basis.

Working hours

The standard working hours in Vietnam are 8 hours per day and 48 hours per week. 

Article 109 of the Labor Code 2019 outlines provisions for rest breaks during working hours in the following manner:

• An employee engaged in at least 6 hours of work per day, as stipulated in Article 105 of the Labor Code 2019, is entitled to a rest break lasting a minimum of 30 consecutive minutes. 
• For night work, this rest break extends to a minimum of 45 consecutive minutes. If a shift spans at least 6 consecutive hours, the rest break is considered part of the total working hours.
• Beyond the rest break detailed in Section 1 of Article 109 of the Labor Code 2019, employers are required to identify additional short breaks and specify them in the internal labor regulations.

Overtime pay

Overtime is permitted, but the number of overtime working hours of the employee does not exceed 50% of the normal working hours in 01 day. 

In case of weekly work, the total normal working hours plus overtime working hours shall not exceed 12 hours in 01 day, and 40 hours in 01 month.

The total overtime working hours do not exceed 200 hours in 01 year and 200 hours in 01 year in the specific fields, works, jobs as manufacture, processing of textile, garment, footwear, electric, electronic products, processing of agricultural, forestry, aquaculture products, salt production; generation and supply of electricity, telecommunications, refinery operation; water supply and drainage and some special cases regulated.

On June 23, 2015, the Ministry of Labor, War Invalids and Social Affairs issued Circular No. 23/2015/TT-BLĐTBXH on guidelines for some Articles on salaries of Decree No. 05/2015/NĐ-CP.  

Overtime pay equals (=) actual pay per hour or per product of a normal working day multiplied by (x) at least 150% or 200% or 300% multiplied by (x) number of additional hours or additional products.

The rates of 150%, 200%, and 300% are specified in Article 98 of the Labor Code 2019. In particular, an employee who works overtime will be paid an amount based on the piece rate or actual salary as follows:

• On normal days: at least 150%;
• On weekly days off: at least 200%;
• During public holidays, paid leave, at least 300%, not including the daily salary during the public holidays or paid leave for employees receiving daily salaries.

Benefits

In addition to the minimum wage, employees in Vietnam are entitled to a number of benefits, including:

• Social, Health & Unemployment Insurance (SHUI)

• Health insurance: The rate of health insurance is 4.5% of the employee's monthly salary. The employer is responsible for paying 3% of the employee's salary, and the employee is responsible for paying 1.5% of their salary.
• Unemployment insurance: The rate of unemployment insurance is 2% of the worker's monthly salary. The employer is responsible for paying 1% of the worker's salary, and the worker is responsible for paying 1% of their salary.
• Compulsory Social insurance: The employer is responsible for paying 17.5% of the employee's salary, and the employee is responsible for paying 8% of their salary.

The total contribution rate of SHUI is 32% of the employee's monthly salary. The employer is responsible for paying 21.5% of the employee's salary, and the employee is responsible for paying 10.5% of their salary.

Please note that these rates are subject to change. The most recent rates were announced in July 2023.

• Paid sick leave: Employeesare entitled to 30-60 days of paid sick leave per year  which depends on each situation. This leave can be used for any type of illness, including both short-term and long-term illnesses.
• Paid maternity leave: Female employees are entitled to 6 months of paid maternity leave. This leave can be taken before or after the birth of the child.
• Paid paternity leave: Male employees are entitled to a maximum of 14 days of paid maternity leave depending on each situation.. This leave can be taken to care for the newborn child.

Performance Evaluation and Management

Performance evaluation and management are essential components of HR system setup. An effective system provides tools for setting performance goals, conducting regular assessments, and facilitating constructive feedback.

HR systems enable managers to create performance appraisal processes tailored to their organization's needs. They offer templates for defining key performance indicators (KPIs) and competencies relevant to each role. This data-driven approach ensures that performance evaluations are objective and aligned with the company's goals.

Performance management features within HR systems allow managers to track employee progress, provide feedback, and set development goals. This continuous feedback loop fosters employee growth and identifies high-potential individuals who can contribute significantly to the organization's success.

Training and Development

Investing in employee training and development is crucial for building a skilled and adaptable workforce. HR systems support these initiatives by streamlining the planning, tracking, and evaluation of training programs.

HR systems can help businesses identify skills gaps within their workforce, enabling them to tailor training programs to address specific needs. This ensures that training efforts are targeted and result in a more competent workforce.

Additionally, HR systems can automate training registration, track attendance, and manage training records. They also facilitate e-learning and online course management, allowing employees to access training materials conveniently. A well-structured training and development strategy, supported by HR systems, enhances employee engagement and reduces turnover.

Labor Relations and Compliance

Maintaining positive employee relations and ensuring compliance with labor laws are essential for long-term success in Vietnam's competitive labor market. HR systems provide tools to foster effective communication, manage employee grievances, and ensure legal compliance.

Effective communication is crucial for resolving workplace issues and promoting a healthy work environment. HR systems often include features such as employee self-service portals, where employees can access information, submit leave requests, and communicate with HR departments. This transparency and accessibility improve employee satisfaction and engagement.

Additionally, HR systems facilitate grievance management by allowing employees to report issues and track their resolution. These systems maintain a record of grievances and resolutions, which can be invaluable for preventing similar issues in the future and demonstrating compliance with labor regulations.

Moreover, HR systems help companies adhere to labor regulations through automated compliance checks and alerts. They can generate reports to ensure that employment contracts/agreements, working hours, and other labor-related matters comply with Vietnamese law. This reduces the risk of legal issues and penalties, safeguarding a company's reputation and financial stability.

Final Thoughts

In the rapidly evolving business landscape of Vietnam, establishing a robust human resource system is not just a necessity; it's a competitive advantage. Overcoming challenges in compliance, talent acquisition, cultural adaptation, and more is essential for success.

Viettonkin specializes in helping businesses set up comprehensive HR systems in Vietnam. With our expertise and experience, we empower organizations to navigate the complexities, ensuring seamless operations and compliance with local regulations.

Are you ready to elevate your company's HR in Vietnam? Contact Viettonkin today, and let's embark on a journey of efficiency, compliance, and growth together.

In the dynamic landscape of Vietnamese business, effective talent management services have become paramount. With its burgeoning economy, Vietnam is a hotspot for growth, making talent management a critical component for sustained success. At Viettonkin, we understand the unique challenges and opportunities within this vibrant market.

As a leading authority on talent management services in Vietnam, we have honed our expertise to provide holistic talent solutions tailored to the Vietnamese context. In this article, we delve into the intricacies of talent management, exploring strategies that empower businesses to thrive. Join us on this journey to unlock the full potential of talent in the heart of Southeast Asia.

Viettonkin’s Expertise in Talent Management

Viettonkin stands at the forefront of delivering top-notch talent management services in Vietnam. Our commitment to providing comprehensive solutions sets us apart in the industry.

At the heart of our approach lies a holistic view of talent management. We understand that effective talent management encompasses not only recruitment but also development and retention. Our services cover the entire talent lifecycle, ensuring that you have the right people in the right roles at all times.

What truly differentiates Viettonkin is our ability to blend local insights with global talent management excellence. We recognize that the Vietnamese market is unique, and our strategies are tailored accordingly. Yet, we don't stop there. Drawing from international best practices, we infuse a global perspective into our services.

Our success is rooted in our unwavering commitment to Talent Acquisition Strategies, Talent Development Programs, and Talent Retention Strategies. Through a combination of local expertise and a global mindset, we provide you with the tools to navigate the intricate talent landscape in Vietnam.

As a result, our clients not only excel in talent management but also gain a competitive edge in the Vietnamese business arena. We measure our success by the growth and prosperity of the businesses we partner with.

Navigating Challenges in Talent Management

The Vietnamese business landscape is a dynamic arena filled with opportunities and challenges. To excel, it's crucial to employ effective strategies and practices that can give your organization a competitive edge in Vietnam.

Effective Talent Acquisition Strategies

Leveraging Local Expertise

Many foreign companies operating in Vietnam opt for local expertise through work contracting or project-based hiring. This offers flexibility and cost-effectiveness during market exploration or product development phases. For this purpose, companies often rely on the services of a third party, such as Viettonkin Consulting, which provides comprehensive Staff Augmentation services, including Professional Employment Organization (PEO), Employees of Record (EOR), and Payroll Administration.

Building Strong Employer Branding

Employer branding is pivotal for multinational enterprises in Vietnam. Given the intense competition for top talents, establishing a robust employer presence is essential. Strategies include harnessing social media, partnering with universities for talent fairs and internships, and targeted advertising campaigns. In this competitive landscape, foreign companies must position themselves as appealing destinations for Vietnam's highly qualified, globally-ready young professionals.

Timing Matters

Understanding Vietnam's recruitment calendar is critical. Key milestones, such as university graduations in May and September, significantly impact recruitment success. Strategic planning that aligns with these timelines is essential for optimizing recruitment outcomes.

Performance-based Hiring

Performance-based hiring, which extends beyond skill-based methods, represents a paradigm shift in the recruitment process. While skill-based hiring focuses on evaluating candidates based on their mastery of specific skills, typically assessed through proven track records, live demonstrations, or placement tests, performance-based hiring centers on assessing  candidates' achievements and career progress. 

We believe that attracting exceptional candidates involves creating a compelling Employee Value Proposition (EVP) that positions the role as a stepping stone in one's career. This shift requires a comprehensive evaluation process, emphasizing "doing" and "becoming" over transactional considerations.

Our method focuses on role-specific performance objectives, fostering conversations that align candidate career growth with success. This approach widens the candidate pool, considering diverse individuals and high performers.

In essence, Performance-Based Hiring flips the hiring process by emphasizing "doing" and "becoming," minimizing the focus on "having" and "getting." We start by defining what a candidate must do to succeed at their job, not just the skills they should possess. This approach broadens the talent pool, ensuring a match between candidates' career progression and company success.

Talent Development Programs for Growth

Leading FDI firms and MNCs in Vietnam excel in crafting prestigious talent programs, notably flagship Management Trainee Programs. These multi-year initiatives set clear development milestones and robust career paths, attracting top-tier applicants from Vietnamese universities.

Graduate Recruitment Programs

These programs target recent graduates, offering them entry-level positions and structured training programs. MNCs often hire graduates from top universities in Vietnam. For example, PwC Vietnam, EY or Deloitte have an annual graduate recruitment program called “Fresh Graduate Recruitment Programme”, targeting recent graduates for entry-level positions and provide comprehensive training.

Internship Programs

Internship programs provide students and recent graduates with hands-on experience in a specific industry or role. MNCs use internships as a pipeline for future full-time hires. At IBM Vietnam, internship programs for students and recent graduates are open. These programs allow interns to gain practical experience in areas like technology and consulting. In addition, Internship Programs in Viettonkin aim to recruit and train talents for new projects, enhance Viettonkin's employer branding, and prepare interns as Reserve Human Resources.

Leadership Development Programs

Designed for high-potential individuals, leadership development programs groom future leaders within the organization. Participants undergo specialized training and mentoring to prepare them for leadership roles. VinaMilk is a Vietnamese leading dairy corporation with a widespread presence globally. The corporation has the Management Trainee Program for 18 months, targeting potential future leaders. This program attracted over 1,500 top talents from universities nationwide in 2020.  

At Viettonkin, we also have a 2-year Management Trainee Program, offering certified training, engaging job rotations, and a clear trajectory towards senior management positions.

Talent Development and Training Programs

These programs focus on upskilling and developing existing employees. MNCs invest in continuous learning opportunities to ensure their workforce remains competitive and aligned with industry trends. A notable example is ABB Vietnam with its annual “Apprenticeship Program” to attract, train and retain talents from engineering majors. 

Mentorship Programs

Mentorship programs pair experienced employees with newer recruits. Big MNCs like Unilever, Nestles, Microsoft Vietnam have formal mentorship programs to facilitate knowledge transfer and professional development among its employees.

Furthermore, “Succession Planning Programs'' in Viettonkin are designed to develop current managers and high-contributing individuals into future leaders and C-level executives. These programs establish comprehensive, long-term Learning & Development initiatives.

Technology-Driven Recruitment

Leveraging advanced technologies, such as artificial intelligence and data analytics, MNCs optimize their recruitment processes. Applicant tracking systems, online assessments, and video interviews are common components. FPT Corporation is a leading technology company in Vietnam that uses advanced technologies in its recruitment process - the SIS (Smart Interview System). With this technology, the corporation can filter approximately 25,000 out of 42,2000 applicants with suitable profiles, constituting a 59% success rate. Hence, this streamlines the screening process, significantly saving time, resources, and costs associated with applicant assessment and interviews.

Ensuring Talent Retention with Strategies in Vietnam

Talent Retention Essentials

Talent retention is as crucial as acquisition and development. In Vietnam's competitive job market, keeping your top talents is paramount. Successful strategies involve fostering a work environment that encourages growth, engagement, and loyalty.

Tailored Career Progression Plans

Developing clear and individualized career progression plans for your employees is essential. Vietnamese talents, like professionals worldwide, seek advancement opportunities. Offering a well-structured career path within your organization can significantly enhance retention rates.

Competitive Compensation Packages

Competitive salaries and benefits packages are essential retention tools. MNCs operating in Vietnam recognize this and often tailor their compensation to attract and retain top talents.

Employee Engagement Initiatives

Engaged employees are more likely to stay. Strategies such as regular feedback, mentoring programs, and involving employees in decision-making processes contribute to higher job satisfaction.

Professional Development Opportunities

Investing in ongoing professional development not only enhances employee skills but also demonstrates your commitment to their growth. Offering training and educational opportunities can be a powerful retention strategy.

Work-Life Balance

Maintaining a healthy work-life balance is increasingly important for employees. Ensuring reasonable working hours and providing support for employees' well-being can enhance retention.

Final thoughts

In shaping effective talent management strategies in Vietnam, talent management services play a pivotal role. These services, including Talent Acquisition, Development, and Retention, are essential in navigating the dynamic Vietnamese job market.

At Viettonkin, we excel in providing talent management services tailored to your specific needs. With our deep understanding of the local landscape and global best practices, we bridge the gap between talent and success.

Explore how Viettonkin can elevate your talent management efforts and drive sustainable growth. Contact us today for personalized solutions that empower your business to thrive in Vietnam and beyond.