Vietnamese electric vehicle (EV) giant VinFast is set to accelerate its international expansion with the establishment of a new manufacturing plant in India. Scheduled to start production by mid-2025, six months ahead of the original timeline, the plant will initially have an annual production capacity of 50,000 electric vehicles. However, this plant will not only cater to the Indian domestic market but will also serve as a global export hub, reinforcing VinFast’s growing presence in international markets.
This move comes as part of VinFast’s broader strategy to expand its footprint beyond Southeast Asia. In its recent Q3 2024 earnings call, the company emphasized that the new Indian and Indonesian plants would play crucial roles in its international ambitions. Le Thi Thu Thuy, chairwoman of VinFast, highlighted the strategic importance of these plants in fulfilling the company’s goal of penetrating global markets, including the United States, Canada, the Middle East, and Southeast Asia.
VinFast’s shift toward international markets is especially important as the company faces challenges in meeting its domestic sales targets. Despite a strong 115% year-on-year increase in EV deliveries in Q3 2024, the company has only met 55% of its annual sales target in Vietnam. Analysts are questioning VinFast’s ability to hit its goal of 80,000 vehicles by the end of 2024. To address this, the company has focused on expanding its reach internationally, with international sales making up 9% of total deliveries in Q3 2024, a significant increase from just 3% the previous year. The new plant in Tamil Nadu, India, is a key part of VinFast’s plan to meet both domestic and export demands. In January, the company signed a memorandum of understanding (MoU) with the Tamil Nadu government for a $2 billion investment in the EV sector, starting with $500 million over the first five years. This facility will assemble Complete Knocked Down (CKD) parts and will scale its production capacity from 50,000 vehicles to 300,000 units, based on demand.
VinFast has already made significant strides in its global expansion. As of October 2024, the company operates 173 showrooms worldwide and has entered the Middle East market with the opening of a dealership in Dubai. Additionally, the company has secured Letters of Intent with dealers across 15 Indian cities to expand its local presence. To support its rapid growth, VinFast recently increased its capital expenditure by 21% in Q3 2024, to $132 million, focusing on investments in the Indian and Indonesian plants. Furthermore, recent filings with India’s Registrar of Companies (RoC) show that VinFast Auto India has raised its authorised capital from ₹208 crore to ₹1,250 crore, signaling its commitment to expanding its operations in the country. With the India plant poised to start production soon, VinFast is positioning itself as a key player in the global electric vehicle market, and its focus on both local and export markets could prove essential in achieving its ambitious growth targets.