“VinFast, due to its strategic approach and adaptability, has the capacity to carve out a niche for itself and earn the confidence of Indian consumers,” Forbes India stated in regards to VinFast’s plans to construct a factory in the South Asian nation.
Advantages of VinFast entering India
A Forbes India article titled “After Tesla, India will soon welcome another global electric vehicle manufacturer. What are VinFast’s plans?”
In the beginning of the analysis, the renowned magazine cites information that VinFast – the third highest valued auto manufacturer worldwide – selected India because it is the third largest vehicle market globally, with only 1% accounting for electric vehicles. This condition presents numerous opportunities for growth.
VF 5 Plus is considered one of the VinFast models sold in India
According to Forbes, VinFast is currently researching the market and planning to establish a completely knocked-down (CKD) assembly plant in India. The facility could potentially be located in Gujarat or Tamil Nadu – India’s two automotive hubs. With the CKD approach, vehicles will be assembled in India using imported parts and components, benefitting from the lowest tax rate of 15%.
Forbes reported that VinFast will introduce 3 models to the Indian market: VF 3, VF 5, and VF e34.
Harshvardhan Sharma, head of the automotive retail department at Nomura Research Institute, assessed that VinFast is approaching the Indian market with a distinctive strategy – the CKD model, in contrast to Tesla’s local manufacturing strategy. “Although Tesla’s commitment to production in India is commendable, the CKD format may provide certain advantages, such as faster market entry, reduced initial investment, and flexibility in responding to market demand. This strategy also enables VinFast to gauge market response before committing to large-scale production,” quoted the well-known financial magazine from the expert.
VinFast’s potential to establish a foothold in India
“Why India?” Forbes questioned, believing that VinFast’s expansion plans in the Indian market coincide with the Indian government closely monitoring the entry of electric vehicle manufacturers from China. Currently, only BYD and MG Motors represent Chinese electric car brands in the Indian market.
However, according to Harshvardhan Sharma, BYD’s success in India is indicative of the high-end electric vehicle demand in India. VinFast, as a newcomer, can certainly leverage this potential market.
VinFast has a diverse product range with great potential in India
In recent years, electric vehicles in India have demonstrated significant appeal as both domestic and foreign automakers begin developing green models. Globally, automakers such as GM, BMW, and Ford are projected to invest over $500 billion in the development of electric vehicles in the coming years. In India alone, automakers from Tata to Mahindra have also made efforts to develop their own models, as the Indian government aims for electric vehicles to account for 30% of total domestic sales by 2030.
The Indian electric vehicle market is expected to experience a compound annual growth rate (CAGR) of 90% in this decade, reaching $150 billion by 2030, presenting many opportunities for companies like VinFast.
In regards to VinFast’s ability to penetrate the market, Harshvardhan Sharma stated, “India has a large and dynamic market with a rising appetite for electric vehicles. To gain trust and connect with Indian consumers, VinFast must emphasize quality, reputation, reasonable pricing, and customer-centricity. Additionally, offering competitive prices and a diverse product portfolio will help VinFast connect with Indian consumers who value choice and affordability,” Forbes analyzed, quoting the expert’s remarks.
From this analysis, Forbes concludes that rapidly expanding into markets with tremendous potential like India is a logical move for companies like VinFast, as the company intensifies its involvement in the electric vehicle sector and becomes “Vietnam’s answer to Tesla.”
“The Indian automobile market is diverse and full of opportunities. VinFast, with its strategic approach and adaptability, has the capacity to create a distinguished position and earn the trust of Indian consumers,” Forbes quotes the evaluation of Harshvardhan Sharma.
TH (Tuoitrethudo)
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