VinFast, a Vietnamese manufacturer of electric vehicles (EVs), is working quickly to launch its operations in India. According to two people with knowledge of the company’s plans who spoke to Mint on condition of anonymity, VinFast plans to sell its first two- and four-wheelers in India starting in the third quarter or second half of 2024.
The business has hosted dealer “clinics” in Vietnam with thirty to thirty-five possible Indian dealer partners, and it will shortly unveil its distributor network, which will showcase both two- and four-wheelers. These cars will be imported by the business as fully assembled units (CBUs).
One of the people mentioned above stated that VinFast, a Vietnamese company that sells battery-electric sport utility vehicles (SUVs) in the A to E segments (entry-level, compact SUV to ultra-luxury SUV), would probably target a price point of about ₹18–20 lakh for its first import into India. They did, however, add that import duty structures on fully built-up cars in India could tip that pricing higher. Vehicles over $40,000 are subject to an import tax of 100%, while vehicles under $40,000 are subject to an import duty of 70%.
Although VinFast runs a combination of dealer-run showrooms, self-operated experience centers, and direct sales and showrooms in the US and Vietnam, the company plans to enter the Indian market gradually by first appointing dealers in sizable tier-1 cities before expanding to smaller towns and cities in the interior.
The other individual mentioned above said, “VinFast can position itself as not only an entry-level player, but it can also do well to have one or two products in the more high-end of the market, given the Indian automotive sector and consumers moving up the value chain.” He continued, “The company has received that feedback, but it may decide to launch with a single CBU product at a lower cost.”
In addition, VinFast is actively building a leadership team in India and hiring a sizable workforce to support its operations out of the National Capital Region’s Gurugram.
Apart from the three countries it is currently present in, VinFast is looking to expand its global footprint in regions where it expects “high demand for EVs,” and India is one of the seven international market clusters in Asia, Africa, Latin America, and Europe, the company said in a US Securities and Exchange Commission filing.
VinFast’s growth in the EV market
Over the previous four years, the market for electric cars has expanded at a compound annual growth rate (CAGR) of 14%. VinFast’s entry strategy made sense as Tesla had indicated that it intended to enter the Indian market. Given that SUVs make up a sizable portion of the market, VinFast is likely to aim its entry SUV toward India, giving it access to over 10% of the market. The main rival will be Tata Motors, according to Ravi Bhatia, president of the auto insights company JATO Dynamics India.
In order to build an integrated EV manufacturing plant in India, VinFast plans to invest $500 million in Tamil Nadu over the course of the next five years. The greenfield factory is expected to start production in 2026.
On August 15, VinFast formally went public on the Nasdaq Global Select Market, having successfully merged with Black Spade Acquisition Co. Its market valuation varied greatly following a sharp decline and is currently slightly under $15.4 billion, having crossed the historic $230 billion level only days after it was listed.
When VinFast first entered the US market, there was much fanfare because of the company’s aggressive pricing, futuristic styling, and emphasis on electric vehicles (EVs). However, as other Chinese EV players faced more competition in the US market, there was also excitement. VinFast recently said that, aside from its factory in North Carolina, it has no intentions to construct another factory in the US. Instead, it intends to establish local manufacturing operations in India and Indonesia, two sizable and populated markets.
Consumer confidence was damaged by problems with software flaws and uneven construction quality that plagued VinFast’s VF8 SUV deliveries in the US during the early going. However, the business is stepping up with robust warranties and product updates to compete in a highly competitive market with established competitors like Tesla.
