VinFast, a unit of Vietnam’s largest conglomerate Vingroup JSC VIC.HM, is set to become the country’s first fully-fledged domestic car manufacturer as the company is projecting to have its first car available commercially in August of 2019.
Currently, the company already has established a new plant in the northern Vietnamese port town of Haiphong, where two models will be built. And for a start, VinFast is looking to manufacture 250,000 cars annually in the next five years of production. This is equivalent to 92 percent of all the cars sold in Vietnam in 2017 according to data collated by the Vietnam Automobile Manufacturers’ Association (VAMA). To add to this, the company has earmarked about USD 3.5 billion for the project and has even debuted two vehicles at the Paris Motor Show in 2018. Commenting on the company’s ambitions, Jim Deluca, CEO of VinFast has said that, “[VinFast is] looking to expand both within ASEAN and outside.”
Beyond these vehicles, VinFast also intends to move forward with a city car through a partnership with General Motors that will also extend to automotive sales, where General Motors has given VinFast exclusive distribution rights for Chevrolet-branded vehicles in Vietnam. Other technology agreements are also underway between VinFast and General Motors and this will add on to VinFast’s expanding portfolio of partnerships such as the company’s current partnership with Siemens for the development of domestic electric buses.
As of now, a majority of the cars sold in Vietnam are foreign brands assembled in the country from kits. However, a series of free trade agreements have reduced import duties and this has opened up the market for domestic manufacturers. For example, a 30 percent import tax on cars from other Association of Southeast Asian Nations (ASEAN) countries was removed in 2018.