Vinfast Stops Producing Some Cars in India

A year after the Vietnamese automaker entered a critical growth market, VinFast (VFS.O) has suspended plans to manufacture three electric vehicles in India and ordered suppliers to stop work on the projects while it reassesses costs, according to two sources and a company memo examined by Reuters.

The manufacturer has requested that suppliers “hold all activities” on three programs: the VF 6 and VF 7 SUVs, which it imports as kits from Vietnam and assembles there, and the VF 3, a two-door SUV that is anticipated to be its most competitive product in the market.

The suspension represents yet another setback for VinFast, a losing company that has looked to India for expansion after struggling to increase its market position in the United States and Europe.

It has not been previously disclosed that plans to produce the three automobiles locally in India have been suspended.

In an effort to establish a regional manufacturing base that would serve South Asia, the Middle East, and Africa, Vinfast committed to investing $2 billion and constructed its first facility outside of Vietnam in southern India last year.

Following the publication of this story, VinFast informed Reuters that it will continue to import and assemble the VF 6 and VF 7 that are currently being marketed in India and that the change in production plan refers to future models. Additionally, VinFast stated that in order to expedite local sourcing, it intends to create models tailored to India rather than merely importing worldwide models.

Although VinFast has openly declared that it is boosting local procurement from India, including through collaborations with domestic suppliers, plans to manufacture the VF 3, VF 6, and VF 7 in the nation have not yet been revealed, according to sources familiar with the situation who spoke to Reuters.