Vietnamese EV maker VinFast sets foot in India with $2 billion factory

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Vietnamese EV maker VinFast sets foot in India with $2 billion factory

BM Desk:

Vietnamese electric vehicle (EV) manufacturer VinFast is making a bold move into the rapidly growing Indian market with a planned $2 billion investment in its first overseas factory. The facility, to be located in the southern state of Tamil Nadu, marks a significant step in VinFast’s ambitious global expansion plans.

VinFast announced the project in a statement released on Saturday, outlining an initial commitment of $500 million for the first five years. The company aims to create a “first-class electric vehicle production hub” in Tamil Nadu, with an annual capacity of up to 150,000 units. Construction is expected to begin this year and generate up to 3,500 local jobs.

VinFast, Vietnam’s first homegrown car manufacturer, has set its sights on competing with established EV giants like Tesla. However, its overseas expansion has not been without challenges. Out of the 11,300 vehicles it sold in the first half of 2023, over 7,100 were bought by a company owned by the same parent company as VinFast. Additionally, the firm’s Nasdaq listing in August experienced a dramatic and volatile valuation swing.

Despite these early hurdles, VinFast remains optimistic about its international prospects. The Tamil Nadu factory is seen as a crucial step in establishing a strong presence in key markets and strengthening its global supply chain. Tamil Nadu state chief minister M.K. Stalin welcomed the deal, calling it a “great leap in the industrial development” of the state.

Further to the India investment announcement, VinFast also named Pham Nhat Vuong, chairman of parent company Vingroup, as its new CEO on Saturday. Vuong, Vietnam’s richest man with a net worth of around $4.6 billion, takes over from Le Thi Thu Thuy, who held the post since 2021 and now becomes the chairwoman of the board of directors. Vuong’s direct oversight of global production, sales, and marketing is expected to play a key role in driving VinFast’s international ambitions forward.

VinFast’s entry into the Indian EV market promises to be a game changer for the country’s automotive landscape. The company’s commitment to investing in local production and creating jobs aligns well with India’s push towards building a robust domestic EV ecosystem. While challenges remain, VinFast’s bold move into India signifies the growing global ambition of Vietnam’s rising EV star.

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