Vietnam Builds Domestic Railway Industry Alongside Major Rail Expansion

Vietnam, October 2026 — Vietnam is accelerating efforts to establish a domestic railway industry alongside its plans to expand rail connectivity in major cities and across the country. The strategy aims to ensure that railway investment supports not only transport improvements but also manufacturing growth, workforce development and technology transfer.

Ho Chi Minh City is considering eight rail routes, including seven proposed new double-track lines using standard gauge, with connections extending towards destinations such as Can Tho, Ca Mau and Tay Ninh. The estimated investment for the proposed new routes exceeds VND 544 trillion. Hanoi is also pursuing five metro lines targeted for completion by 2030, while other urban rail proposals include a light rail connection between Phu Quoc airport and the planned 2027 APEC conference site, alongside transport links in Da Nang.

The proposed North–South high-speed railway represents another major component of the expansion. With a projected investment exceeding US$67 billion and a planned route of approximately 1,541 kilometres, the project could create long-term demand for rolling stock, railway steel, signalling equipment, electrical systems, engineering services and maintenance facilities. Developing domestic suppliers in these areas could help retain more economic value within Vietnam as the network expands.

Local companies are already positioning themselves to participate. Hoa Phat is developing a rail and specialty steel plant at Dung Quat, with a designed capacity of 700,000 tonnes annually, and is also exploring rail accessories. Meanwhile, THACO is working with South Korea’s Hyundai Rotem on locomotives and passenger carriages, with cooperation covering technology transfer and localisation. These initiatives could support domestic production while building experience in railway manufacturing and supply chains.

However, establishing a competitive railway industry will require more than infrastructure investment alone. Vietnam will need skilled engineers and technicians, effective partnerships between manufacturers and operators, clear procurement requirements and measurable technology-transfer commitments. Selective localisation in areas such as steel, construction, components, maintenance and engineering services could help build domestic capabilities while allowing international partners to contribute specialised expertise. The success of this strategy will depend on delivering projects consistently and ensuring local companies can maintain and improve the systems they help supply.

Source: Global Sources