Promoting localization – Strengthening industrial linkages: A strategic direction for Vietnam’s mechanical engineering industry

Long An, April 10, 2025 – As part of the national mechanical enterprise networking program, a delegation from the Vietnam association of mechanical industry (VAMI), along with representatives from various enterprises across the sector, conducted a site visit and working session at Hong Ky factory – one of the pioneers in localization and manufacturing modernization in Vietnam. This event served not only as a networking and knowledge-sharing platform but also as a concrete step toward strengthening industrial linkages and developing a localized mechanical engineering value chain, in line with Vietnam’s push for industrialization and global economic integration.

Hong Ky – A model enterprise in localization strategy

During the session, representatives from Hong Ky mechanical company presented an overview of the company’s production capabilities, featuring a large-scale manufacturing facility located in Duc Hoa District (Long An Province), equipped with modern production lines that have been strategically invested in over multiple phases. The company’s key products – including welding machines, cutting machines, drilling machines and multi-functional mechanical devices – have solidified their position in the domestic market while gradually expanding into regional markets.

A notable highlight in Hong Ky’s development strategy is its process of localizing components and technical parts. The enterprise has progressively mastered core technologies, built a team of specialized mechanical engineers, and invested in a comprehensive research and development (R&D) system.

Localization – The driving force behind a self-reliant mechanical industry

Localization is not merely about replacing imports with domestically produced goods. It is a long-term development strategy that encompasses multiple factors: production capabilities, technical resources, supply chain ecosystems, and especially, strong linkages among enterprises within the value chain. With efforts such as those made by Hong Ky, Vietnam’s mechanical engineering sector is proving that full localization is feasible when backed by a clear vision, serious investment, and coordinated support from all stakeholders.

Localization not only enables cost reduction and greater production autonomy for businesses but also plays a critical role in enhancing national industrial security.

Industrial linkages – The key to sustainable development

One of the most actively discussed topics during the program was industrial linkage – a core factor in driving the localization process. Representatives from manufacturing firms, suppliers, and processing units shared insights on the current lack of systemic connectivity within the mechanical supply chain, which results in resource inefficiencies and hinders the formation of a robust supporting industry.

A VAMI representative emphasized: “To develop the mechanical industry sustainably, we need a business network that shares technologies, establishes unified quality standards, and jointly develops human resources – instead of each enterprise working in isolation.” For its part, Hong Ky expressed its desire to expand cooperation with domestic partners in component manufacturing, technology research, and market distribution – aiming to co-build a comprehensive Vietnamese mechanical engineering ecosystem.

Policy orientation & The role of the association

Beyond business networking, the program also introduced several policy recommendations to guide governmental management agencies. In the context of an economy shifting toward a greater focus on manufacturing, the mechanical engineering sector requires stronger support from the State in areas such as:

Tax incentives for enterprises investing in localization;

Financial and credit support for R&D projects;

Policies encouraging domestic technology transfer;

Development of regionally integrated mechanical industrial clusters.

VAMI reaffirmed its commitment to acting as a vital bridge, facilitating trade promotion, providing strategic information, and supporting enterprises in training, technology transfer and market expansion efforts.

Conclusion: Vietnam’s mechanical engineering vision 2030

The visit and working session at Hong Ky factory represent more than just a business exchange – it symbolizes a microcosm of a broader national strategy: building a modern, self-reliant and globally competitive Vietnamese mechanical engineering industry. With pioneering enterprises like Hong Ky, the active role of associations such as VAMI and supportive State policies, the future of Vietnam’s mechanical sector holds promising prospects.