VinFast, the Vietnamese electric vehicle manufacturer, has officially commenced production at its new plant in Thoothukudi, Tamil Nadu. This development is part of a larger $2 billion investment strategy aimed at expanding their presence in the Asian market, specifically targeting India as a central hub.
The facility, which represents an initial investment of $500 million, is set to produce 50,000 electric vehicles annually. It has the capacity to increase production up to 150,000 vehicles, leveraging its strategic location near a major port, which aids in future regional exports. The plant is expected to generate over 3,000 jobs in the local area, contributing significantly to the local economy.
This move by VinFast is a strategic shift towards Asia after encountering challenges in establishing a presence in Western markets like the US and Europe. The company is also expanding its footprint in other Asian countries, such as Indonesia, Thailand, and the Philippines, with an assembly plant in Indonesia also slated to produce 50,000 cars annually.
The decision to establish the plant in Tamil Nadu was influenced by the region’s manufacturing capabilities, availability of skilled labour, and strong infrastructure. Tamil Nadu’s Industries Minister, TRB Raaja, highlighted the potential of this investment, stating, “This investment will lead to an entirely new industrial cluster in south Tamil Nadu, and more clusters is what India needs to emerge as a global manufacturing hub.”
The Indian plant is not only aimed at serving the domestic market but also at positioning itself as an export hub. Orders have already been received from countries such as Sri Lanka, Nepal, and Mauritius. VinFast’s Asia CEO, Pham Sanh Chau, noted the interest from other manufacturers in relocating production to India, mentioning, “We also have an inquiry from (a manufacturer in) Vietnam who would love to shift their plastic production to support our car.”
VinFast’s ambition is underscored by its global delivery target of 200,000 vehicles for 2025. In the first half of the current year, the company sold approximately 72,100 units, predominantly in Vietnam. VinFast’s expansion into India is a critical component of the company’s strategy to increase its market share in the fast-growing electric vehicle sector.
India is the world’s third-largest car market, with a burgeoning economy and growing demand for electric vehicles.
It also inaugurated its biggest showroom in India, in Chennai. The 4,700 sq. ft. showroom located in Teynampet, is its largest facility among the 35 showrooms expected to open this year. It will showcase VinFast’s premium electric SUVs, including the VF 6 and VF 7.
The company aims to launch 35 dealerships by year-end, across more than 27 cities. VinFast officially opened pre-bookings for its premium electric SUVs, the VF 6 and VF 7, on July 15, with a fully refundable booking amount of Rs 21,000.
