Vietnamese electric vehicle company VinFast recently announced its plans to build a $2 billion production center in southern India.
The new factory is expected to produce up to 150,000 cars per year once it is completed.
The project will include an opening investment of $500 million. Construction will start this year. The production centers are expected to support over 3,000 jobs in the Tamil Nadu state.
The center will be close to the port city of Thootukudi.
VinFast started in 2017 and has been producing electric vehicles since 2021. It already announced plans for a factory in the southern U.S. state of North Carolina. The factory there will cost $4 billion to complete and vehicle production is expected to begin this year.
VinFast brought its cars to market in the U.S. for the first time in 2023. The cars have not sold well in the U.S. because they have received some bad reviews and there are questions about their quality. VinFast officials, however, believe the company can succeed in the U.S.
The company’s stock is listed on the Nasdaq stock exchange, and, for a short time, its shares were worth more than Ford and General Motors. However, by the end of 2023, the company had lost more than $1.4 billion.
VinFast said it hopes to sell its cars in 50 markets by the end of 2024. It announced a $400 million factory in Indonesia late last year. VinFast cars will be used in Laos by Green SM, a taxi company mostly owned by VinFast’s founder.
The production center is the first move by VinFast to enter the growing Indian market. The country has one of the fastest-growing electric vehicle markets in the world. India has launched a $1.3 billion plan to support electric vehicle manufacturing and use.
However, of the 2.3 million EVs in use in India, most are inexpensive motorbikes, rickshaws and scooters. Some experts wonder if there are enough Indians who have the money to purchase a costly electric car.
VinFast is part of Vingroup, which was started as an instant noodle company in Ukraine in the 1990s by Pham Nhat Vuong, who is now Vietnam’s richest man.
I’m Dan Friedell.
