Vietnam's Vingroup Steps Into The Unknown With A National Car Project

It is the dream of many South East Asian countries to have a homegrown car manufacturing industry. This dream is soon to become a reality for the people of Communist-ruled Vietnam, where a local conglomerate called the Vingroup is working around the clock to finish its mega-factory near the northern port of Haiphong.

The VinFast SUV, styling from Pininfarina.

The Vingroup is investing a massive 1.5 billion US dollars in the initial phase to build the factory on an island called Cat Hai. There, the Research & Development and a glitzy HQ buildings are already standing, where there is also a frantic race to raise the rest of the production facility in time to meet the production and launch deadline in just two years. In fact, so big is the build that the Vingroup has had to call in just about all of the pile drivers in the North and quite a few from the South of the country to ensure that it can meet the deadline.

The VinFast 02 model, also a Pininfarina design.

Later this year, the Vingroup plans to start production of an electric motor scooter on the site, and then early next year, want to commence the production of a saloon and an SUV at the facility. According to reports, the Vingroup is hoping to actually display the new cars—a pair of sleek and very sporty offerings emblazoned with a V symbol on the front grille and given the name of Vinfast—at the Autumn Paris Car Show.

Back in the 1970s, the Korean Chaebols made the move into car manufacturing and now Hyundai is one of the largest car manufacturers in the world. But this move by the Vingroup will be entering into unknown territory for the conglomerate, and of course the market conditions are so very different from when Hyundai started to rebadge Mitsubishi cars.

James B Luca, CEO of VinFast.

Vietnamese consumers still favour two wheels over four. And within the country, fewer than 250,000 cars are sold annually, about a quarter of the number in Indonesia where officialdom has steadfastly resisted the temptation of a National Car Project. However—and completely undeterred by the failure of Malaysia’s Proton—VinFast CEO, James B Luca, believes that within a few short years, the market will be buying about 900,000 cars per annum, of which 500,000 will be VinFast’s.

The plan for VinFast is to hit the ground running—or should that be rolling? To accomplish its objectives, VinFast has assembled a team of highly experienced auto manufacturing experts, and has licensed a production platform and engine from BMW. But as many of China’s fledgling producers have found out, a reliance on foreign expertise does not guarantee that the brand will be able to gain proper traction.