Mr. Pham Van Dung, Managing Director of Ford Vietnam
Mr. Pham Van Dung, Managing Director of Ford Vietnam, discusses the automaker’s performance and the state of the industry with VET.
■ What advantages does Vietnam possess for foreign automobile manufacturers like Ford?
Vietnam has a sound future, with economic development and the rate of vehicles per 1,000 people making lives better. Vietnamese consumers are young, active and technologically savvy. Vietnam will host APEC this year and we hope that there will be more positive changes to economic policy to bring an even brighter future to not only the automobile industry but also to economic development.
Ford plans to further drive our growth by continuing to create and introduce global Ford vehicles that Vietnamese customers want and value, as well as by continuing our ongoing efforts to provide our very best Ford customers with an amazing ownership experience. We connect people by offering an unmatched combination of quality, safety, fuel efficiency, smart technology, and value. The One Ford Strategy has brought consistent global quality to the local market, where owning a Ford in Vietnam is no different to owning one in the US or the UK in terms of vehicle performance, design excellence, and driving experience. Besides focusing on business performance, Ford Vietnam also contributes to the local community, with thousands of hours given to corporate social responsibility activities, free safe driving lessons for more than 11,500 drivers and college students, and efforts to help build playgrounds and provide a healthy education for children.
■ Among factors such as cheap labor costs, taxes, business environment, and logistics, which is the most important for Ford Vietnam when considering to expand production in the country? Why?
An investment decision depends on all the variables of an economic feasibility study. Ford has been in Vietnam for more than 20 years, with hundreds of thousands of Ford owners in the country and a large and comprehensive nationwide network. Ford is still recruiting to enlarge production at the Hai Duong plant to meet customer demand for global products. We are confident of going further in Vietnam.
■ Do you have any plans to expand Ford in Vietnam by 2020?
We prefer not to disclose our future business plans. Ford currently has 33 dealerships in key locations around the country. Global Ford vehicles are equipped with a package of advanced technology and the eco-friendly and fuel-efficient EcoBoost Engine - Small but Mighty. Ford Vietnam continues to expand our nationwide Ford dealership network to provide even more convenience and accessibility for our fast-growing customer base.
■ After many years of slow growth and stagnation, the last couple of years have seen a significant boom in car sales in Vietnam. Known for its staggering motorbike population, the country now appears to be rapidly heading towards the age of the automobile. What has caused this change of fortune for the automobile industry and will this new trend create a strong domestic auto industry in Vietnam?
More than 300,000 motor vehicles were sold in Vietnam during 2016 for the first time in history, representing annual growth of 24 per cent. Such a growth trend has been seen for the last three years.
Thanks to the appearance of smart mobility solutions around the world and economic growth and higher incomes in Vietnam, automobiles are becoming more and more accessible and convenient for every young family and individual. We also see greater confidence among small and medium-sized enterprises (SMEs) to scale up their business with investment in motor vehicles. Demand for private transport and increasing urbanization makes Vietnam one of the most energetic markets in Southeast Asia and have contributed to the growth in the country’s automobile industry in recent times. Moreover, the participation of Vietnam in free trade agreements like the ASEAN Free Trade Area (AFTA) will create a broader business environment in which competitiveness is necessary for the development of all companies. Southeast Asia is considered to be a larger common market and this could result in challenges as well as opportunities for Vietnam’s automobile industry.
■ What are the opportunities for automobile companies in Vietnam at this time?
With a population of more than 90 million, a rapidly rising middle class expected reach 30 million people by 2020, and a relatively stable macro-economic outlook, the potential for automakers in Vietnam remains positive. In Vietnam, the rate of vehicles per 1,000 people is still under 50, revealing it to be a great place for growth in motorization.
2017 is a crucial year, before Vietnam fully joins AFTA and tariffs on completely-built-unit (CBU) motor cars with at least 40 per cent ASEAN content will fall to zero. Tougher competition will push brands to serve customers better, with smart and green products and quality services at dealerships. I believe that each auto company will settle its own business strategy in Vietnam.
■ Ford remains consistently global with its “One Ford” strategy. What is your strategy to develop Ford in Vietnam to meet demand from the new generation of customers in the country?
The “One Ford” plan has been fundamental to the progress we have made in recent years and is fundamental to our future performance. The “One Ford - One Team, One Plan, One Goal” strategy, where we deliver the best products to consumers in the shortest time and at the most efficient cost, has enabled Ford to be one of the three fastest-growing automobile brands in Vietnam, with annual growth in 2016 of around 40 per cent compared to 2015. This strategy aims to optimize the global workforce and extend new technologies. The evolution of technology in daily life has led to much demand in providing innovations that provide accessible solutions to better transport in the future. Ford Vietnam always find ways to adapt to a constantly changing environment to accelerate our pace of progress to drive operational excellence and profitable growth for all.
■ What do you think about competition in Vietnam’s automobile market? What is Ford doing to keep its position in the Top 3 fastest-growing brands in Vietnam?
Vietnam will be more active with the appearance of various global brands. I believe that competition is a “catalyst” for setting goals and attaining achievements. Each company must have their own strategies for cutting production costs, improving their capability, and delivering high quality products and services that result in customer satisfaction. Together with the “One Ford” strategy, Ford also follows four brand pillars: Quality, Green, Safe and Smart. We commit to taking the right direction to win the hearts of our beloved customers.
■ What would you suggest the Vietnamese Government do to support the automobile industry?
Ford Vietnam believes that the Vietnamese Government will continue to support the industry with clear and consistent policies and regulations toward the Master Plan 2030. We always want to work closely with government agencies to consult on effective policies to build a fair and competitive automobile industry for Vietnam that can compete in regional and global markets.