VinFast India deep dive: Products and India plans explained

VinFast has taken Vietnam by storm. They have won in their home market — beating the likes of Hyundai, Honda and Toyota to become the best-selling carmaker in the country and have done so in an incredibly short time. The company was founded as recently as 2017. In 2022, it made a hard pivot to EVs and it has been upwards since. VinFast has a line-up spanning segments, from entry-level EVs to rival the MG Comet to SUVs that can take on the Kia EV9. They’ve already expanded to North America, Europe, the Middle East, and Southeast Asia. The next frontier is India. Construction of their manufacturing plant in Thoothukudi, Tamil Nadu, is nearing completion, and their first launch is set to take place before the festive season. They’re investing big: an initial investment of USD 500 million is just the start, investments of up to 2 billion USD are on the cards.

VinFast Cars Launching in India

VinFast will be entering India with two electric cars to begin with — the VF 7 and VF 6. These SUVs sit in important segments for India. The VF 7 is about 4.5m long, which makes it a little shorter than the Hyundai Tucson while the VF 6 is 4.3m long which puts it in Creta electric / MG Windsor territory.

“India is the only country we target the segment of VF 7,” says Pham Sanh Chau, VinFast CEO Asia. He cites two reasons for this, “The number one reason is that VF 7 is a very good product to launch our lineup and brand in India. The second reason is that we want to position ourselves as a premium EV car brand, not a low-end car brand. Once we enter with VF 7, that will make the customers more inspirational. In the future, we hope that we will be able to bring the whole lineup.” The VF 7 and VF 6 should launch in India within two weeks of each other, and it is possible that the entry-level VF3 could make it to India by next year. VinFast also has the VF 8 and VF 9 SUVs, however, these products are currently targeted at Europe and the USA.

VinFast’s India plans

VinFast sees plenty of opportunity to grow in India. “India is one of the most important markets because firstly, it’s the third largest automobile market. Secondly, it's a very promising and growing market and thirdly, the EV adoption is still comparatively low. Therefore, we decided to take this opportunity to enter the market,” says Chau.

The company also seems to be here for the long run. The manufacturing plant and the investment it entails is a clear indication of that. Initial production capacity will be 50,000 units a year, with the ability to scale that up to 1.5 lakh units a year depending on market demand and export opportunity. The plant should be ready in the next two to three months and production will begin soon after. Chau explains, “Some OEMs start with the import of CBUs to test the market. Then, they either build the factory or they don't build the factory. For VinFast, we have done the market research and we think it is very important for us to enter the market with the factory first.”

Another one was the ability to tap into the existing supplier base. “Localisation is extremely important,” says Chau. Elaborating on the reasons for it, he says, “It helps you to bring down the cost. Secondly, you get federal government incentives. Thirdly, it makes your product more localised that allows you to be more competitive. Currently, we already have a certain percentage of our products sourced from Indian suppliers.” No specific percentage of localisation was mentioned, but certain parts like the body in white and the infotainment screens will be localised from launch. The focus will be on components that are easily available in India and won’t make sense importing from Vietnam.

As for its network, VinFast hasn’t committed numbers or elaborated on which regions it will be targeting. What it has said is that it does see EVs being embraced across cities, including Tier 2 and Tier 3 cities. The official word for now is that VinFast will have an “appropriate brand presence” across India and has plans of continually expanding its dealership network as and where it sees opportunities.

On what will make VinFast appealing

“Firstly, we have strong confidence in our product. We have very good quality,” says Chau. More on that soon. Chau has more reasons to be confident, “Secondly, we have outstanding after-sales. Thirdly, I know that India is market-sensitive, so we will have an affordable price. These are the three basic elements. But in addition to that, we will build the two ecosystems, one for VinFast and one for Vingroup to support VinFast.”

“I can be very honest that no single OEM can be able to do so. Just tell me — which OEM will be able to build the whole ecosystem, but not in the way we are building? Luckily enough, because we are blessed, VinFast is blessed to have a very, very rich holding or rich parents. So we can play the game we want to play because we have very good parents, generous parents, and wealthy parents,” he laughs.

Building the VinFast ecosystem

VinGroup, which is VinFast’s parent company, is a large organisation and has its fingers in many pies in Vietnam — hospitality, real estate, education, medical services, retail, and technology. They talk a lot about their “ecosystem” and how it all comes together to improve the lives of its customers. VinFast is the automotive subsidiary, and even within that, there is plenty of chatter of an ecosystem.

The dealers — that will open over the next month — are just one part of it. Service will be a big part of this, and VinFast has interesting plans. Chau explains, “In addition to the dealer's authorised shop that other OEMs are doing, we also want to expand another network of what we call third-party workshops. We want to give the consumer a sense of confidence that once they take the car out of the city, they have the workshop available to attend to their issues immediately.”

A charging network will be on the cards too. In Vietnam, the company has already set up 1.3 lakh charging points. V-Green, a subsidiary of VinGroup that sets up EV chargers is currently being incorporated in India and will be tasked with setting up chargers across India. “At the same time, we are teaming up with other charging providers like Tata,” says Chau. Right now, V-Green chargers in Vietnam, Indonesia and the Philippines are exclusive to VinFast cars however the company is still studying whether this would make sense for India as well. “If we go for the model of public charging, we may have the incentive from the government, because we have been in touch with some state governments, and they are ready to give some incentive,” he continues.

VinFast is considering bringing GSM — Green and Smart Mobility Joint Stock Company — an all-electric taxi service using VinFast cars in India. “You can see GSM everywhere in Vietnam. We have the same thing in Indonesia, in Laos, and we are launching very soon in the Philippines. We want to do the same thing in India,” he says. It is a smart strategy, as it ensures VinFast will have a customer for its cars in the future. In Vietnam, cars like the VF5 and VF e34 are used in this service and they could be on the cards if GSM does become a reality in India.

VinFast also plans to set up a company that will buy back / swap VinFast secondhand cars in the future, or even lease them out. "That kind of whole ecosystem will help VinFast to grow. In addition to that, we work with the bank for dealer financing and customer financing,” says Chau.

VinFast doesn’t just build cars

VinFast also builds a number of other mobility products. “You know that we build the whole line-up, ranging from electric bicycles, two-wheelers, four-wheelers, pick-up trucks, buses,” says Chau. “We want to build the whole line-up into India. We are starting with the four-wheelers,” he continues.

There is certainly potential for two-wheelers in India. “We are in discussions with a number of local partners. We are discussing the model, whether it's a contract manufacturing or it's a sharing arrangement. A lot of points have been in discussions. But our principle is that we want to keep our brand name VinFast… We aim to bring the e-buses too.”

The biggest challenge for VinFast?

Post the interaction, I pulled Pham Sanh Chau aside to ask him what he thinks the biggest challenge for India is. He says it is the price. Getting the price right will be critical to the success of VinFast in India, according to him. I followed that up by asking if he doesn’t see awareness as a challenge. He shot back very matter-of-factly with the example of Ford. “Everyone knows Ford,” he says. And yet, they couldn’t make it work in India. So awareness may not be the biggest challenge and certainly isn’t as big a challenge as price.

If it isn’t obvious already, VinFast moves quickly. Scaling up from a start-up in 2017 to the biggest carmaker in Vietnam with a global footprint in under a decade is no mean feat. An entire facility being built up in India in a mere 15 months is very impressive. VinFast still believes it operates like a start-up, operating swiftly and correcting course along the way if needed. Products are being developed in record time as well — much like the VF 6 and VF 7 that are headed our way. We have driven both the VF 6 and VF 7. They are currently under embargo, but you can expect our reviews to drop on June 10, so stay tuned!