According to the Vietnamese Ministry of Industry and Trade information Centre, ASEAN has become an important trading partner of Vietnam. The average annual trade volume has grown 17% in recent years. Also, the trade between Vietnam and ASEAN has preceded the amount between Vietnam and ASEAN countries, including the European Union, Japan, and the United States. Later, it will be developed into ASEAN plus three (10 countries plus China, Japan and Korea) or even ASEAN plus six (10 countries plus China, Japan, Korea, New Zealand, Australia and India). Driving by ASEAN, continue to serve as the main mechanism to promote the East Asian Community, with tariff-free or low-tariff preferences for intra-regional product trade. Therefore, the specific strategies plan are as follows.

Countermeasures

Motorcycle

Industry TrendsOpportunitiesRiskCountermeasures
•Diversified product lines to satisfy the demand for one-stop purchasing•The infrastructure in Vietnam is still at the development stage. The day-to-day transport relies mostly on motorcycles.••The growth in Vietnam’s motorcycle market has slowed.•International certification (ISO 9001, ISO/TS 16949)
•As Eurocharm continues to deliver on quality and reliability, customers, likewise, began to invest trust in the Company.
•Mass production for cost-effective and competitive products•The scale of the ASEAN economy continues to grow, along with the demand for motorcycles.•The core product design capability still lies in the hands of OBMs.•In upcoming years, Eurocharm is prepared to strengthen the R&D department with product design capability, adding R&D equipment for drawing and product characteristics verification, and continuously investing in R&D of new products to improve product quality and provide integrated and high value-added products to make our products more competitive.
•Globalization vision with product management and investment in improved automated production•Eurocharm possesses an extraordinary management team.•The cost of largely imported raw materials could be fluctuated by the exchange rate.•In 2016, Eurocharm began domestic procurement along with importing customer certified raw materials. The ratio of local raw materials has gradually increased from 50% to 90%. Due to this shift, the exchange rate has only minimal effect on Company’s operation cost. In addition, with the unified purchase system every quarter, the Company is able to easily manage materials and reduce the risk of running low or waste.

Medical and Healthcare Equipment Industry

Industry TrendsOpportunitiesRiskCountermeasures
•International certification (ISO 13485)
•Trusting employee relations and high productivity
•VPIC1 was accredited with ISO 13485 quality management system for the medical device industry in 2010.
•The world’s population is aging and the demand for medical equipment is increasing.
•American and Japanese medical equipment markets continue to expand as the government implements healthcare supporting polices.
•The Company juggles between producing high-quality refined medical equipment while competing with low-quality affordable products.•Eurocharm’s medical equipment are supplied to a niche market which specializes in long-term home care or patient care. The customers are located in various developed countries including France, Japan, and the United States. Under the circumstances that the target markets are consumers in economically developed countries, the product quality is considered more important than price competitiveness. From the sales growth year after year, it is believed that the customers trust and rely on Eurocharm’s products. Also, as the minimum wages and social insurance expenditure increase in China, Eurocharm has a comparative advantage manufacturing medical equipment in Vietnam. If the competition chooses to source cheaper materials, it should eventually reflect on the quality of the equipment. Additionally, the Company has the capacity of developing medical equipment tooling which sets it apart from the rest of competition. Eurocharm has, on various occasions, co-developed with customers or self-developed tooling or products

Business Plan

The overall global economy is affected by COVID-19. Not only the supply chain become disconnected due to the outbreak of the pandemic, it also severely affected the overall industrial demand in the second quarter. However, various anti-pandemic policies issued by various governments in response to the pandemic in third quarter. As a result, the global operating order was gradually restored, and the economy has gradually entered the right track in the fourth quarter.

Expansion of CapacityEmphasis on Medical Equipment MarketDevelopment of Electric Scooters and Recreational VehiclesDevelopment of Automobile Parts
The Company will continue to invest steadily and continuously based on past experience. Therefore, the Company will continue to budget for equipment upgrades and capacity expansion to accommodate customers’ growing sales. The Company’s plant expansion is start in the fourth quarter of 2020, and plan to complete in the fourth quarter of 2021. The new plant aims to fulfill both existing and future business needs. In addition, the Company will continue the expansion of the tooling factory by acquiring new processing equipment, upgrading the production of tooling, inspection and fixture and accelerating the time for product development. These will accelerate the automated production and reduce the operational risks brought on by the increase in salary in Vietnam.In the effort to diversify market risks, the Company plans to not only pursue tighter cooperation with existing medical equipment manufactures but also seek out new opportunities from Europe, the United States and Japan. With regard to the revenue ratio on this particular sector in 2020, the Company aims to bring in more demand in the upcoming year as the joining of new customers.As of the end of 2020, the Company has started the mass production or development of four electric scooters. With the solid foundation of motorcycle chassis production, the Company has the advantage of developing further business opportunities in the electric scooter sector. In terms of recreational vehicles, the Company has been actively seeking and acquiring business cooperation with companies in North America and Europe. Based on the steady increase in order volume, the Company expects the production will multiply in the upcoming years.In response to the growing auto parts business opportunities by the Association of Southeast Asian Nations (ASEAN), the Company is actively engaged in developing new customers, as well as strengthening the relationship with the existing automobile customers. The Company expects the result to reflect on the profit growth in the future.