VinFast Plans $1.2 Billion Expansion into Indonesia
As per Reuters, VinFast plans to invest around $1.2 billion as part of its long-term strategy for the Indonesian market. This investment includes $150 million to $200 million for a manufacturing facility, anticipated to start operations in 2026, with a production capacity of 30,000 to 50,000 vehicles annually.
This new facility would supplement VinFast’s main plant in the northern port city of Haiphong, Vietnam, and its forthcoming site in North Carolina, USA, set to be operational by 2025.
Recently listed on Nasdaq, VinFast also aims to expand its global presence by venturing into India, Malaysia, the Middle East, Africa, Latin America, and Europe. These expansion plans are primarily aimed at setting up distribution units and launching additional showrooms.
At the ASEAN Business and Investment Summit in Jakarta, VinFast’s CEO Le Thi Thu Thuy stated, “The growing EV ecosystem in Southeast Asia is a driving force for VinFast’s expansion. Indonesia, with its abundant nickel reserves, is a significant player in the region’s battery production industry, providing a positive outlook for the ASEAN EV sector.”
“We foresee potential collaborations in places like Malaysia and Thailand. From a supply chain standpoint, we are confident in sourcing all crucial components regionally. Indeed, we have the potential to elevate the ASEAN EV industry and become a major exporter to the rest of the world,” added Thuy.
According to the Indonesian Automotive Industry Association (GAIKINDO), EV sales in Southeast Asia’s most populous country have skyrocketed over the past three years.
In 2010, only 125 EVs were sold in the country. This number increased to 687 in 2021 and soared to over 10,300 vehicles in 2022. In the first half of 2023, the country recorded sales of 5,850 EVs.
The Indonesian government is also strongly advocating for the development of EVs for daily use by offering subsidies of up to 10% for EV buyers during this period.
Despite several brands having entered Indonesia earlier, only two names, Wuling Motors and Hyundai, hold the majority of the market, which presents competitive opportunities for VinFast.
GAIKINDO’s data shows that Wuling Motors held a substantial 75% of Indonesia’s EV market share in 2022, followed by Hyundai with 20%, credited entirely to the Ioniq 5 model, with Toyota lagging at 1.4%.
At an exhibition in August, the Wuling Air EV was the top-selling vehicle with 885 units, closely followed by the Hyundai Ioniq 5 with 776 units. The Wuling Air EV is priced between approximately $15,800 and $19,500, while the Hyundai Ioniq 5 ranges from $44,350 to $50,930.
According to Bloomberg, VinFast plans to introduce two models, the VF3 and VF5, to Indonesia. The VF3 is set to compete directly with the Wuling Air EV, while the VF5 could provide a budget-friendly, compact alternative suitable for navigating Indonesia’s often congested and narrow urban areas.