- Korean Companies Show Interest in the Vietnam’s Car Parts Sector
- Vinfast, Vietnam’s First and Only Domestic Automobile Company
- Vingroup Starts Work on an EV Battery Manufacturing Facility In the Vung Ang Economic Zone
- Two electric SUVs for the global market
- Vinfast might outperform Korea’s Kia
- Why Invest in Vietnam’s Automobile Industry
- How Can Cekindo Help
The automobile industry in Vietnam is quickly expanding. This market has grown at a rate of 20-30% each year on average, exceeding the Ministry of Industry and Trade’s projections. This is in both importations of foreign-owned vehicles as well as Vietnam’s brand new local car company which is making splashes around the world.
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In the first nine months of 2021, Vietnam imported more than 100,000 automobiles, a 267% rise over the same time the previous year. Automobiles with less than nine seats accounted for the majority of the import rise, demonstrating an increase in the usage of private cars and highlighting the Vietnamese people’s growing purchasing power, according to Asiaperspective.com.
In this article, we will discuss the various aspects of growing Vietnam’s Automobile Industry and how it brings about opportunities to investors.
Korean Companies Show Interest in the Vietnam’s Car Parts Sector
Many companies from the Republic of Korea are interested in connecting and learning more about the Vietnamese market as well as the country’s investment rules, particularly in the areas of car parts, mechanics, and electronics.
This is an excellent chance for Vietnamese industrial parks and enterprises to network with Korean companies in order to attract investment and enhance collaboration in the development of manufacturing value chains. At the moment, one of the main areas receiving attention from firms in Vietnam is auto parts manufacturing.
Vinfast, Vietnam’s First and Only Domestic Automobile Company
Vinfast debuted the world’s first “made-in-Vietnam” automobile at the Paris Motor Show in 2018, capturing the interest of a large number of people. Vinfast unveiled two model series, including the LUX SA2.0 SUV and the LUX A2.0 sedan. Both cars are positioned in the near-premium sector, with powerful engines, modern interiors, and luxurious exteriors. Meanwhile, Vinfast has introduced Vinfast Fadil, a more affordable version that is considerably more appealing to Vietnamese people than the two high-end versions. Thanks to the brand’s efforts and the public’s trust in the company, Vinfast cars may be seen frequently on Vietnam’s roads.
Vinfast is devoted to pursuing an environmentally friendly, green future and sustainability, and the company is now launching a smart EV that runs on electricity, which is similar to Tesla, but originating in Vietnam.
Vingroup Starts Work on an EV Battery Manufacturing Facility In the Vung Ang Economic Zone
The People’s Committee of Ha Tinh Province and Vingroup have officially begun construction on the VinES Battery Manufacturing Factory in the Vung Ang Economic Zone (Ha Tinh), $173.7USD million was invested in 8 hectares of land in Vietnam during the initial phase of the facility.
The opening of this plant is a significant step forward in VinFast’s objective of self-production and worldwide supply of batteries for its electric vehicles.
This will be Vietnam’s first and most advanced battery facility, combining European and American-standard technology and an impressive 80% process automation rate. Vingroup also collaborates with key partners, including some of the world’s most innovative firms in the field of electric car battery manufacturing., according to PR newswire
Two electric SUVs for the global market
Two electric cars, the VinFast VFe35 and VFe36, will be produced in VinFast’s vast, 90% automated production plant in Vietnam. The two cars were created in collaboration with Pininfarina, an Italian automaker.
According to Techcrunch VinFast intends to sell solely electric vehicles in the United States, and its four-year vehicle development timeline is practically unprecedented in the automobile industry in Vietnam. Vehicle deliveries are expected to begin towards the end of 2022.
Vinfast might outperform Korea’s Kia
VinFast’s uniqueness is that it is now producing in small volumes, but it is spending considerably and slowly ramping up production of its innovative new VinFast series. VinFast may someday be able to compete with KK – Korea’s Kia. VinFast is now wealthier, wiser, more talented, and smarter than Kia was in its early days when it was struggling, naïve, and financially weaker. This is why VinFast is in a wonderful position to perform even better for Vietnam in the future decades than Kia did for South Korea, according to Autoexpress.
Related: Vietnam Investor Visa: How can You Get It?
Why Invest in Vietnam’s Automobile Industry
To boost the investment scenario in its automobile industry, Vietnam’s Ministry of Finance suggested a tax strategy in November last year that would decrease or eliminate taxes on domestically made automotive components, lowering total production costs. In addition, the Ministry recommended raising the tax on specific automobiles, which is projected to raise the cost of imported vehicles, according to Asiaperspective.
At the same time, the Ministry of Industry and Trade recommended that vehicle manufacturers and their supporting industries pay a lower corporation tax rate.
Vietnam’s vehicle sector will be exposed to key European car markets, such as Germany, France, and the United Kingdom, as a result of the deal. In exchange, Vietnam has promised to abolish all import taxes on EU automotive exports to Vietnam, including both automobiles and components, over the next seven to 10 years.
How Can Cekindo Help
Company incorporation in Vietnam consists of multiple procedures that are time-consuming and overly official. Having company registration professionals, like Cekindo, by your side can save you a great deal of time as well as provide you with a hassle-free experience. Cekindo provides a wide spectrum of ancillary services related to company registration, like legal consultancy, license and other documents acquisition, tax and accounting, and HR services.