Prime Minister affirmed that a country which has 50 million people should has its own automobile brand. The Government had an intention of building an autonomous and independent economy, so its owned auto brand was very important. Under this context, there was a lot of motorbike put into circulation, the trend of automobilization was popular.
The Prime Minister revealed that as per schedule proposed by the Ministry of Industry of Trade, there are three major clusters of automobile manufacture in Vietnam, in which Truong Hai auto manufacturer and some other projects. Vinfast will coordinate with its partners and manufacturers to have an appropriate distribution in production, especially in specialized products so as to bring into play effectively and efficiently throughout the system.
Prime Minister delivered speech at the ground breaking ceremony of Vinfast automobile manufacture project.
It is expected that Vinfast will have Viet branded motorbikes in September 2018 and Vinfast branded gasolene and electric cars by 2019-2020. "It will be a gigantic attempt," the PM said.
The PM said that the project was very significantly important as it will settle immediately 25,000 laborers, followed by hundreds of factories, workshops to support the automobile manufacture and in the future they will contribute to the state budget as much as the present collected sum of the Hai Phong city.
Automobile export ambition
Deputy president of Vingroup Nguyen Viet Quang said that the target of Vinfast was to become the leading automobile manufacturer of the South East Asia and had a production capacity of 500,000 cars per year by 2025 with pivotal products using internal combustion engines, electric engines and electric motorbikes.
"Vingroup will coordinate with other Vietnamese manufacturers to develop the support industry altogether turning out spare parts and accessories, step by step reaching the local content ratio of 60 per cent, controlling technology and targeting export," Quang said.
Vingroup makes investment in automobile manufacture under the context that import cars are prevalent, import tax on cars imported from ASEAN will reduce to zero per cent in 2018 from the present 30 per cent.
Regardless of such a pressure, another auto manufacturer Truong Hai has just kicked off Mazda branded automobile production workshop which has an investment capital of VND12,000 billion (roughly US$530 million) and has a capacity of 100,000 units a year.
The factory is scheduled to turn out 50,000 cars in its first phase by April 2018.
Truong Hai auto manufacturer's President Tran Ba Duong firmly believed that its cars would have a high content ratio to export to ASEAN country so as to take advantage of preference of import tax.
The auto cluster of Truong Hai located at Chu Lai economic zone, Quang Nam province is currently assembling Mazda, Thaco, Hyundai, Kia, Peugeot branded cars.
Viet branded cars bring European quality
Le Thi Thu Thuy, Vingroup's vice president said that in the first phase, Vinfast would inject around US$1 to 1.5 billion in the project.
Vingroup disclosed that Credit Suisse investment bank would arrange a loan of US$800 million for the factory.
In the initial stage, the factory will turn out a 5-seat sedan and 7-seat SUV cars and electric motorbikes and have a capacity of 100,000-200,000 units per year.
Important components such as engines and main structure systems would have their design purchased from leading designers in Europe and the US. Particularly the car models would be created by studios of Italy.