MC Exclusive I Vietnam-based VinFast to enter Indian e-car market by H2 CY2024 amid govt's duty slash plan

Vietnam-based VinFast to enter Indian e-car market by H2 CY2024 amid govt's duty slash plan

Vietnam-based multinational automotive company VinFast Auto Ltd is drawing up plans to roll out its battery-run cars in the Indian market at a time when the government is reportedly considering some tax reductions on imported Electric Vehicles (EVs).

The Haiphong-based firm will initially be importing its electric Sports Utility Vehicles (e-SUVs) as Completely Built Units (CBU) in the first phase. A year later, the company will start importing Completely Knocked Down (CKD) kits and will assemble its models in India, as revealed by informed sources.

“VinFast Auto intends to leverage on the government’s medium-term plans to reduce import duties on electric cars. Once the duties are slashed, the Vietnamese company will start importing its models during the second half of next year. In 2025, Vinfast India will establish its manufacturing facility, which could be either a greenfield or brownfield one, where it will be assembling the models initially and later building them with a higher level of localisation,” an industry source the company has been consulting with, told Moneycontrol, on condition of anonymity.

Investments planned

The source also revealed that its Indian facility will entail an investment outlay of Rs 200-250 crore and will have a capacity of 1.5 lakh units per annum. However, the utilisation levels will be less than one-third in the first phase of manufacturing operations, as per the source. 

Another source privy to the company's plans, who also requested anonymity, told Moneycontrol, “VinFast Auto will largely be focusing on e-SUVs for the Indian market. While the carmaker is offering multiple models for the US and home markets, it will initially be shipping in VF6, VF7, VF8, and VF9 to India. A pure electric micro or mini-SUV, which is tailormade for the Indian market, will also be launched eventually. All the e-SUVs, except the India-specific model, will be displayed at the 2025 Auto Expo.”

A questionnaire emailed to VinFast Auto spokesperson multiple times by Moneycontrol remained unanswered.

While VF 6 is a B-segment (sub-compact) SUV, VF 7 is a C-segment compact SUV. Similarly, VF 8 is a D-segment midsize SUV while VF 9 is an E-segment full-size SUV.

Aggressive plans 

More than a month back, VinFast Chief Executive Officer Le Thi Thu Thuy had stated that it plans to “aggressively move” into Southeast Asian markets, starting with Indonesia, and expects to eventually raise “a lot of capital” to fuel its global expansion plans. . There were also a lot of speculation that the Vietnamese EV maker is planning to set up its production unit in India in order to make cars for global markets. While ET reported that the company made some some visits in Tamil Nadu and Gujarat to explore feasibility of setting up a plant there,  an Autocar India report claimed that  it is in preliminary talks with Ford India to buy out American carmaker’s defunct facility in Chennai. 

Last week VinFast announced that it has appointed former diplomat Pham Sanh Chau to head its Indian operations.

“VinFast is an ambitious player and is very quick in the development cycle of new models. Its entry into India will definitely pump more energy into the EV supply chain and create more choice for Indian consumers,” said Puneet Gupta, Director (India & ASEAN Automotive Sales Forecast), S&P Global Mobility.

He added that India is on high priority for VinFast and it is also expecting to export to other neighbouring markets from India.

VinFast Auto Ltd was established in 2017 by Vingroup, one of the largest private conglomerates in Vietnam that was founded by Phạm Nhật Vượng. It is the first Vietnamese car brand to expand into global markets as well as the first to expand into producing EVs such as cars and scooters.