VinFast Halts Cars Production In India To Reassess Costs: Report
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Vietnamese EV maker VinFast is reportedly halting its production of select cars in India to reassess costs.
Reuters reported that the company has asked its suppliers to hold all activities on three programmes, including a two-door SUV called VF3, VF6 and VF7 SUVs. As per sources, VinFast could not achieve its planned costs for developing and sourcing parts locally in India.
Local manufacturing was expected to help the company reduce costs and eventually price its cars more competitively in India.
The report further said that VinFast has asked suppliers to share details of investments already made for the three vehicle programmes, raising questions about the potential financial impact on component makers and whether suppliers will be compensated for tooling, engineering and other investments undertaken for the projects.
Inc42 has reached out to VinFast Asia CEO Tapan Ghosh for comments on the development. The story will be updated based on the response.
Last year, the Vietnamese EV major planned to boost its annual electric vehicle production up to 1.5 Lakh in India and export them to countries in the Middle East and Africa, depending on its market demand.
Following which, VinFast inaugurated its first manufacturing facility in India at Thoothukudi in Tamil Nadu, with committed phased investments of up to ₹16,000 Cr ($2 Bn) and an additional $500 Mn in December.
The facility has given the Vietnamese company a significant lead in manufacturing. It is targeting to produce 50,000 vehicles from the plant annually and scale this capacity to 1.5 Lakh units once fully operational.
Besides this, VinFast parent Vingroup-owned electric mobility arm Green SM entered the Indian market with the launch of Green SM Limo, an electric cab service, in Delhi NCR in June.
It is pertinent to note that the current development does not necessarily mean VinFast is stopping sales of its vehicles in India. The automaker will continue assembling the VF6 and VF7 models at its Tamil Nadu facility using completely knocked-down (CKD) kits imported from Vietnam.
VinFast entered the Indian passenger EV market with the launch of the VF6 and VF7 electric SUVs earlier this year.
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