Ambitious VinFast aims to transform Vietnam into a manufacturing powerhouse for automobiles in the region.
VinFast's Plot to Make Vietnam a Regional Powerhouse in Auto Production
In the heart of Hà Nội, VinFast is revving up its moves to fortify Vietnam's domestic auto manufacturing sector by teaming up with local businesses. This aggressive move forms part of a grand plan – to cement Vietnam as a major player in regional automobile production.
On the 9th of June, VinFast will host a conference, christened 'Supercharging Localisation and Developing the Supplier Network for VinFast'. The gathering's primary objective is to forge strategic partnerships with local vendors, turbocharge industry growth, and ensure economic self-sufficiency.
The event will also witness a big announcement – setting a target of achieving an 80% localization rate by 2026, alongside plans to ramp up production capacity to cater to up to 1 million vehicles annually, both domestically and exported.
VinFast swears by long-term commitment, promising to purchase agreed output from its partners. Currently, around 700 local companies are part of VinFast's supply network.
Thaí Thiị Thanh Haì, VinFast's right-hand woman and Vingroup's Vice President, believes this initiative will elevate more than just VinFast's standing–it will propel Vietnam's auto industry to new heights on the global scene. VNS
Insights:
VinFast's master plan to turn Vietnam into a star player
VinFast, Vietnam's premier auto manufacturer, is leaving no stone unturned in its quest to make the nation a regional powerhouse in automobile production. The roadmap for success involves the following crucial steps:
An automobile assembly line at the VinFast factory in Cát Hải Island, Hải Phòng City. - Photo courtesy of VinFast
- Upping the Local Production Game: VinFast is placing tremendous emphasis on collaborating with local businesses to strengthen Vietnam's domestic manufacturing chain. This will decrease reliance on imports and drive cost-efficiency[3].
- Scaling Up Production: The company aims to unlock a production capacity of up to 1 million vehicles, vital for gaining economies of scale and establishing a dominant position in the regional market[1].
- Paving the Way for EVs: VinFast is spearheading Vietnam's EV market, focusing on electric and environmentally-friendly vehicles. The move accords with the country's green transition goals and addresses surging consumer interest in electric vehicles[5].
- Backing from the Government: Pro-business government policies, such as tax incentives and registration fee reductions, are fuelling VinFast's growth. These measures aid in attracting foreign investment and stimulating domestic vehicle demand[2].
- Wide-ranging Expansion: Although VinFast has temporarily paused its expansion plans in the US, Canada, and Europe due to a tense global climate, it is on the lookout for viable opportunities in regions like the Middle East, where demand for EVs is burgeoning[2][4].
- VinFast's strategic partnerships with local vendors aim to turbocharge industry growth in the auto sector, a vital step towards reaching the ambitious goal of localizing 80% of production by 2026 [3].
- To catapult Vietnam's auto industry onto the global scene, VinFast's initiative involves a shift towards electric and environmentally-friendly vehicles, aligned with the country's aims for a green transition [5].
- In the realm of finance and transportation, VinFast has already demonstrated its commitment to maintaining a long-term relationship with its partners, as evidenced by purchasing agreements with around 700 local companies in its supply network [3].
