What opportunities are there for the supporting industry to attract capital from Japan?

Promote domestic procurement and increase localization rate

Vietnam is an attractive destination with a transparent investment environment and increasingly improving competitiveness. As of June 2025, Vietnam attracted 43,702 FDI projects from 151 countries, with a total registered capital of about 519.54 billion USD. Japan is the third largest investor with 5,603 projects, registered capital of 79.47 billion USD, focusing on processing industry, infrastructure and digital transformation. The Vietnam - Japan comprehensive strategic partnership has connected the business communities of the two countries, aiming for green growth and sustainable development.

Sharing at the recent workshop "Investment promotion in supporting industry", Mr. Takahiro Kono - Project Director, Japan External Trade Organization (JETRO) in Hanoi said: According to JETRO's survey, in 2024, 56.1% of Japanese enterprises in Vietnam plan to expand investment in the next 1-2 years, the highest in ASEAN, showing great expectations for the Vietnamese market.

Japanese companies such as Toyota, Canon, and Panasonic focused on expanding their sales and production functions, taking advantage of rising domestic demand, and exporting to markets such as Japan (65% of total exports) and the United States (5.7%).

*Mr. Takahiro Kono – Project Director, Japan External Trade Organization (JETRO) in Hanoi. Photo: Do Nga*

"The domestic procurement rate of Japanese enterprises in Vietnam will reach 50.9% in 2024, an increase of 7.7% compared to the previous year, the highest in ASEAN. However, only 15.7% will come from Vietnamese enterprises, the rest will mainly come from Japanese suppliers. This shows that there is a lot of room for developing domestic supporting industries," Mr. Takahiro Kono pointed out.

Specifically, according to Mr. Takahiro Kono - Project Director, Japan External Trade Organization (JETRO) in Hanoi, the main challenges include: Quality and technical capacity, Vietnamese enterprises have not met the strict standards of Japanese corporations. Lack of raw material suppliers, limiting the ability to supply components and spare parts domestically.

To overcome this, Mr. Takahiro Kono said that JETRO, in coordination with the Vietnam Trade Promotion Agency (VIETRADE), will organize the Vietnam - Japan Supporting Industry Exhibition (SIE 2025) from August 6 to 8, 2025 at the ICE Exhibition Center (91 Tran Hung Dao, Hanoi) to create opportunities to connect Vietnamese enterprises with Japanese investors, promote domestic procurement and increase the localization rate.

Solutions to the challenges of building a supply chain

Sharing more at the event, Mr. Masaru Onaga - CEO of Onaga Vietnam Co., Ltd. said that Onaga is a joint venture company of Onaga Japan, established in 1978. With 48 years of experience, Onaga Vietnam has strengths in mechanical processing, especially with hard, long, or heavy materials, and has expanded into the production of aircraft engine components, industrial gas turbines, and industrial robots.

Pointing out the opportunities and challenges of investing in Vietnam, Mr. Masaru Onaga said that Onaga Vietnam is currently actively promoting domestic procurement to increase the localization rate, however, the proportion of components purchased from Vietnamese enterprises is still low, due to limitations in quality, technical capacity, and lack of raw material suppliers. The company has cooperated with local enterprises that meet high quality management standards, and trained according to AS9100 (Aerospace Quality Management) standards to ensure that products meet the requirements of the aviation and aerospace industry.

*Mr. Masaru Onaga – CEO of Onaga Vietnam Co., Ltd. Photo: Do Nga*

According to Mr. Masaru Onaga, Onaga Vietnam faces many challenges in building a supply chain in Vietnam: Firstly, local businesses have not met the strict standards of the aviation industry.

Second, supplying products from raw materials to final delivery requires a complex integration process, which many Vietnamese enterprises have not yet met.

Third, complicated administrative procedures: Document forms lack standardization and often need to be edited, leading to prolonged time to complete procedures. Inconsistency between the person in charge and superiors also causes delays.

Fourth, achieving AS9100 certification requires high costs, which is a barrier for local businesses.

Fifth, there is a lack of guidance on the required documents, making it difficult for Japanese businesses to fully prepare.

In order to increase the localization rate and attract more Japanese enterprises, promote supporting industries and attract investment, according to experts, Vietnam needs to soon overcome challenges in quality, administrative procedures, and certification costs.

Specifically, Mr. Chu Viet Cuong - Director of the Industrial Development Support Center, Department of Industry, Ministry of Industry and Trade proposed that it is necessary to standardize forms and procedures such as providing unified application forms and checklists for businesses to easily prepare. Simplify administrative procedures for Japanese businesses to enter the Vietnamese market without going through a consulting company.

The workshop "Investment promotion in supporting industry" with the participation of over 200 domestic and international delegates discussed many solutions to promote the development of supporting industry in Vietnam.

Workshop "Investment promotion in supporting industry" with the participation of over 200 domestic and international delegates.

Support for certification costs: The Vietnamese government should support the costs of AS9100 certification for local businesses, similar to the support from the Japanese government for Onaga Japan. Provide an official Vietnamese translation of the AS9100 standard to ensure accuracy and ease of understanding.

Strengthening Vietnam-Japan cooperation: The two governments should cooperate to develop unified forms and checklists to create trust for Vietnamese and Japanese businesses. Support Japanese businesses to enter the Vietnamese market and expand into fields such as aviation, aerospace, and semiconductors.

Training and capacity building: Strengthening links between training institutions and businesses to develop high-quality human resources to meet the requirements of the supporting industry. Supporting local businesses to improve technical capacity and quality management.

Mr. Chu Viet Cuong emphasized: From policies to attract investment in supporting industries, tax incentives, land, and support for Vietnamese enterprises have been creating a favorable environment for FDI enterprises, especially from Japan. With 56.1% of Japanese enterprises planning to expand investment and 50.9% increasing domestic purchases, Vietnam is becoming a strategic production center in the global supply chain. Accordingly, the synchronous implementation of solutions from process standardization to cost support and bilateral cooperation will contribute to building a sustainable supply chain, promoting industrialization, modernization and international integration of Vietnam.

Source: https://congthuong.vn/co-hoi-nao-cho-nganh-cong-nghiep-ho-tro-hut-von-tu-nhat-ban-413888.html