VinFast to make in India: This is the landscape that awaits the Vietnamese EV maker
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Vietnamese electric vehicle (EV) maker VinFast launched its first manufacturing facility in India on Monday, marking a key step in its expansion into the world's third-largest auto market.The company's $500-million EV plant is located in Tamil Nadu's Thoothukudi district, and is part of a planned $2 billion investment in India and a broader expansion across Asia. The facility will initially make 50,000 electric vehicles annually, with room to triple output to 150,000 cars.Production at the factory is scheduled to begin this month, with assembly for right-hand drive vehicles destined for India and possible exports to other markets.VinFast also opened a new showroom in Chennai, expected to be its largest in India. It will showcase VinFast's premium electric SUVs, including the VF 6 and VF 7. Close on the heels of Tesla's entry in India, the automaker plans to prioritise the India market, and is looking to launch 35 dealerships by year-end, across more than 27 cities.VinFast has partnered with local firms such as RoadGrid , myTVS, and Global Assure for after-sales and charging networks. It is also working with BatX Energies for battery recycling.The company faces significant challenges in India, such as establishing a dealer network, creating brand recognition in a crowded market, ensuring accessible pricing and supporting customers.Vinfast's India entry is part of a broader shift in strategy by the company.The EV maker is focussing on Asian markets after struggling to gain traction in the US and Europe. It broke ground last year on a $200 million EV assembly plant in Indonesia, where it plans to make 50,000 cars annually. It is also expanding in Thailand and the Philippines.Vinfast sold nearly 97,000 vehicles in 2024, triple its numbers the year before, but only about 10% of those sales were outside Vietnam. As it eyes markets in Asia, it hopes the factory in India will be a base for exports to South Asian countries such as Nepal and Sri Lanka and also to countries in the Middle East and Africa.India is the world's third-largest car market by number of vehicles sold. It has a fast-growing economy, has seen a rising adoption of EVs and has conducive government policies.Chinese EV companies have seen better traction in Asian countries such as Thailand and Brazil as compared to India.Due to geopolitical tensions with China since 2020, India has barred Chinese companies, including BYD, a major competitor of Tesla, from building factories here. Some then turned to partnerships. China's SAIC, owner of MG Motor, has joined with the JSW Group. MG Windsor, a five-seater, sold 30,000 units in just nine months, bringing Tata Motors ' 70% EV market share down to about 50%.Tata was the first local automaker to court mass-market consumers with EVs. Its 2020 launch of the electric Nexon , a small SUV, became India's first major EV 4-wheeler success.The Vietnamese company doesn't have these issues and will also benefit from incentives such as lower land prices and tax breaks for building locally in India.EV growth in India has been led by two and three-wheelers, which accounted for 86% of the over 60 lakh EVs sold last year. Sales of four-wheeler passenger EVs made up only 2.5% of all car sales in India last year, but this has been increasing, jumping to more than 110,000 in 2024 from just 1,841 in 2019.'The electric car story started (in India) only three or four years ago,' Charith Konda, an energy specialist who looks at India's transport and clean energy sectors for the think-tank Institute for Energy Economics and Financial Analysis told AP.(With inputs from AP)
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