Prime Minister Nguyen Xuan Phuc (R) and Tran Ba Duong, President of Truong Hai Automobile Company (Thaco Truong Hai) at a conference to promote investment in Quang Nam, March 26, 2017. (Photo: Cafef.vn)

In 2003 when Chu Lai Open Economic Zone was still barren land, the Truong Hai Automobile Company (Thaco Truong Hai) decided to build a plant there.

Pham Van Tai, Thaco’s Deputy Director, told VOV: “14 years ago, we decided to invest in Chu Lai because it fit the company’s development strategy. At that time Chu Lai was Vietnam’s first open economic zone, offering the best preferential policies compared to other economic parks. Chu Lai had a large area of land suitable for Truong Hai to build automobile and automobile auxiliary plants.”

Thaco leads the domestic market thanks to its strategic vision. Last year, Truong Hai assembled more than 112,000 automobiles worth 774 million USD. The company contributed 629 million USD to the provincial budget, nearly 70% of the total.

Pham An, Deputy Director of the Management Board of Chu Lai Open Economic Zone, said that after 14 years Truong Hai’s area has expanded to 600 hectares, including a logistics centre, car and component factories, a vocational school, and a seaport. It employs 9,000 workers, 600 of them engineers.

“Truong Hai has 24 factories. It currently manufactures and distributes models for Kia of South Korea and Mazda of Japan. Over the years, especially in 2015 and 2016, Chu Lai Truong Hai contributed greatly to the growth of the province and Chu Lai Open Economic Zone,” An said.

Thaco has developed a strategic target of becoming a leading Vietnamese multi-sectoral Industry Group in ASEAN. It will focus on constructing the Truong Hai-Chu Lai Mechanical Automobile Industrial Zone through a joint venture with partners with advanced technologies. It will increase technology transfer, invest in the support industry to increase the localization rate, and participate in global value chains by exporting automobile parts and components that meet international requirements.

Mr. Tai said: “All leaders of the company are well aware of the need to cut waste to reduce prices for consumers, particularly in 2018 when the tariff on CBU (Completely Built-Up) cars imported from ASEAN will be slashed to 0%. Price-cutting forces us to increase the localization rate, which is also the government’s expectation. To realize that goal, we must renew our technologies through joint ventures with major firms who will transfer technology to us.”

Thaco has created jobs for thousands of workers in Nui Thanh district. Thaco’s achievements are partly due to great support from the government and the Quang Nam administration.

Dinh Van Thu, Chairman of the provincial People’s Committee, said: “Thaco has been a success in Quang Nam with its production of automobile components and assembly. Quang Nam has spoken highly of Truong Hai’s efforts and determination over the past years. Thaco’s current localization rates for buses, trucks, and cars have significantly contributed to the development strategy of Vietnam’s automobile industry. Quang Nam strongly believes in the success of Thaco in developing Vietnam’s automobile industry. Quang Nam wants to make Truong Hai-Chu Lai Mechanical Automobile Industrial Zone a national multi-purpose mechanical center and will submit that proposal to the government.”

In 2017, Truong Hai intends to produce 117,000 cars and contributed 686 million USD to Quang Nam’s budget.