Ho Chi Minh City powers up as industrial giant post-merger

Vietnam’s southern economic engine Ho Chi Minh City is shifting into high gear, fueled by a landmark merger with neighboring industrial hubs Binh Duong and Ba Ria-Vung Tau.

The expanded HCMC is on a journey to become a regional manufacturing powerhouse, leveraging a potent mix of innovation, production muscle, and strategic logistics to drive growth.

Mega project signals bold ambitions

At the heart of this transformation is Thaco Group’s 786-ha mechanical industrial park with a total investment of VND75 trillion ($2.87 billion) in the former Binh Duong province, set to break ground in August 2025.

The high-tech complex, slated for operation by September 2026, aims to integrate suppliers into a streamlined production chain, bolstering Vietnam’s supporting industries. It is projected to create 30,000 jobs, including 10,000 for skilled technicians.

“This will be a national-scale mechanical hub, a magnet for domestic and foreign firms,” said Do Minh Tam, general director of Thaco Industries. The new-generation park will feature cutting-edge infrastructure, including automated systems, digital platforms, and artificial intelligence.

The project is a cornerstone of HCMC’s post-merger industrial push, capitalizing on Binh Duong’s manufacturing prowess, Ba Ria-Vung Tau’s energy and port logistics, and the city’s innovation hub. In 2024, the region contributed VND930 trillion ($35.57 billion) to the national industrial output, accounting for over 25% of Vietnam’s total.

The city now oversees 66 industrial and export-processing zones spanning 27,000 ha, with plans to scale up to 105 zones covering 49,000 ha by 2050, according to deputy head of the HCM City Export Processing and Industrial Zones Authority (HEPZA) Tran Viet Ha.

Strategic planning, smart technologies

With a population now nearing 14 million, the merged metropolis is Vietnam’s economic, industrial and commercial hub. Its officials are continuing to double down on a modern, green, and sustainable industrial model, focusing on advanced manufacturing, digital transformation, and supporting industries through targeted policies for 2021-2025.

But challenges abound. Soaring logistics costs, a scarcity of clean industrial land, outdated technologies, and global trade headwinds are squeezing progress. The merger’s regulatory overlap has frustrated investors, while a shortage of skilled labour threatens to cap growth. Economists are pushing for a “one-stop shop” mechanism to fast-track approvals for big-ticket projects.

At a recent seminar, Dr. Tran Du Lich, chairman of the Advisory Council for implementing Resolution 98, warned that that sticking to low-cost labor and traditional industrial models risks locking the city into a middle-income trap. He called for a pivot to high-value sectors via green tech, digitalisation, and an industrial-service-seaport corridor linking Binh Duong to the Cai Mep-Thi Vai deep-water port.

A hi-tech vocational training network focused on automation, industrial design, digital control, smart logistics, and clean energy is also critical, experts said.

The municipal Department of Industry and Trade rolled out a five-pillar strategy to steer development. Priorities include synchronized industrial, logistics, and energy infrastructure, with specialised zones, technology parks, and large-scale integrated logistics zones powered by green energy.

Technological upgrades, automation, and digitalisation are central to producing high-tech goods for smart urban and sustainable economic models. To supercharge supporting industries, the city is considering incentives for investments in new materials, strategic components and localised production. Workforce development is another priority, alongside a push for green industries and a circular economy.