According to The Hindu (India), Tamil Nadu Chief Minister M.K. Stalin attended the groundbreaking ceremony for VinFast Auto’s electric car factory on a 160-hectare site in the industrial park of the Tamil Nadu Industrial Development Corporation (SIPCOT) – Thoothukudi suburb – with an investment of $2 billion.
In the initial phase, the Vietnamese company will invest $500 million. “This is an important step towards the strategic partnership between VinFast Auto and the Tamil Nadu Government to promote green transportation development,” the newspaper said.
After signing a Memorandum of Understanding (MoU) between VinFast and the Tamil Nadu government on January 6 at a global investors conference held in Chennai, the Vietnamese electric carmaker decided to establish this production facility.
VinFast electric car production plant has been inaugurated in Tamil Nadu, India.
The production capacity, as stated by Vinfast, is up to 150,000 cars per year and will create 3,000-3,500 new jobs in the initial phase. When the entire $2 billion is invested, the project will directly and indirectly create jobs for about 10,000 people.
With this joint venture, Thoothukudi becomes the third automotive center in Tamil Nadu after Chennai and Hosur, and Tamil Nadu is the only state in India with three automotive centers, according to The Hindu.
“This facility will not only serve the development goals in the Indian market but also serve the export demand to Southeast Asian, Middle Eastern, and African countries,” quoted Indian newspaper the words of Mr. Pham Sanh Chau, CEO of VinFast India.
Mr. Chau added, “In addition, the project will promote green transportation, an important government initiative in India and states to reduce carbon emissions in the transport sector, aiming for 30% of new private cars registered to be electric.”
The CEO of VinFast India also emphasized that as Vietnam’s leading electric vehicle manufacturer with global aspirations, the relentless dedication to innovation and research by VinFast has led the company to aim to become a global leader in the electric vehicle industry and commit to a sustainable future for everyone.
The first car from Thoothukudi will be launched in the market 15 months after the groundbreaking.
Mr. Chau said, “Because Thoothukudi is fortunate to have excellent connectivity to the seaport, airport, and skilled labor force, we decided to establish our factory in this port city.”
VinFast India factory has an initial investment of $500 million out of $2 billion. Production capacity is 150,000 cars per year. Illustrative photo.
Tamil Nadu Industry Minister T.R.B. Rajaa said Tamil Nadu, which has developed into the “auto hub of India,” will soon become the “auto hub of South Asia” as 70% of electric bicycles and 44% of electric cars are produced in Tamil Nadu.
VinFast proposed India to reduce taxes for people to get acquainted with
During the groundbreaking ceremony, VinFast India CEO Pham Sanh Chau told Reuters that VinFast has begun construction of a factory in the southern state of Tamil Nadu and aims to start production in mid next year, initially for domestic sales before exporting.
Like Tesla, VinFast also proposed a 100% reduction in import duties for completely built electric cars in India, which was opposed by domestic car manufacturers. India, the world’s third-largest automobile market, is reviewing the requests but has not made a decision yet, a government official said last month.
A government spokesperson did not immediately respond to Reuters’ request for comment.
Mr. Pham Sanh Chau – CEO of VinFast India. Photo: Reuters.
“We … proposed import tax reduction … for example, by reducing the tax to 70% to 80% in just two years and for a very limited quantity of cars to make customers familiar with our products,” Mr. Pham Sanh Chau said on the sidelines of the VinFast factory groundbreaking ceremony in Thoothukudi.
“The central government is still considering this matter. But while waiting for the final decision of the central government, we continue to build our production base,” Mr. Chau said.
Electric car models accounted for about 2% of India’s car sales last year, but the federal government is targeting 30% by 2030 and is implementing a program to attract electric car manufacturers.
Reuters quoted a VinFast statement: The Tamil Nadu project will have a capacity of up to 150,000 cars per year, compared to 250,000 cars at the main plant in Vietnam.
Mr. Pham Sanh Chau said the company has cooperated closely with about 55 Indian dealerships to have a sales network and in the future may also find ways to sell two-wheelers in this country.
