Vietnamese electric car maker VinFast is moving slowly on its India launch strategy. The firm had initially ventured into India with big plans in its mind, which also included opening a giant factory in Tamil Nadu and selling thousands of EVs in the first year itself. However, VinFast is currently slowing down its tempo to be in a position to better suit the ground reality and challenges in India.
Initially, VinFast had planned to sell 4,500 electric vehicles in the initial year. However, that number has now been cut down to approximately 3,000 units. This shows that the company is adopting a more cautious and realistic plan. Rather than going for huge numbers immediately, VinFast appears to be prioritizing learning the market, establishing appropriate systems, and winning customer confidence gradually.
Along with the slowing down of their Indian venture planes, they have also delayed the entry of Vinfast’s electric SUV, VF6. The company had earlier committed to beginning production in its Tamil Nadu factory by June 30. However, that date is now being advanced to July 30. Thus, the bookings will now open from mid-July, and deliveries to customers will commence from mid-August. This delay will give VinFast more time to get ready for the launch, set up logistics, and ensure that the customer experience is smooth.
VinFast seems to be establishing its dealership network. The company initially shortlisted around 40 potential dealer locations at the Bharat Auto Expo at the start of the year. But most of them have since withdrawn. Currently, only around 8 to 10 dealers are fully committed. The main reason for this drop is said to be a lack of transparency in VinFast's service network, pricing strategy, and distribution policy. In a country like India, where after-sales service and local support are matters of significant concern, an inability to have a proper dealer network might prove to be a powerful negative factor for any new car maker.
VinFast is also looking at a new production strategy. The company is looking at importing its cars in CKD (Completely Knocked Down) kit form and assembling them locally at the Tamil Nadu plant. This will have the potential to cut costs, generate local employment, and also make the cars more competitively priced. The CKD model will be used in vehicles like the VF6 and VF7, which will be the first vehicles to hit the market.
Despite the different start, VinFast has not changed its long-term India strategy. The firm has already committed to investing up to USD 2 billion in India. Some of this involves a first phase of investment of USD 500 million in its factory that will be capable of producing up to 50,000 cars annually. The factory will also create new jobs in Tamil Nadu and boost the development of the local EV ecosystem.
Later, VinFast plans to launch additional models in India, including smaller, entry-level EVs like the VF3. For now, though, the company is entering with its premium electric SUVs to establish a foundation. After establishing the foundation, it may expand and offer more models to appeal to more Indian automobile consumers.
The Indian EV market is growing, but it's also a difficult sector to enter. Several car manufacturers have struggled to find the proper balance of price, service, and product. VinFast seems to have learned it is sometimes better to take one's time and tweak as necessary ahead of time rather than try to rush out with expansion. While the lower sales target and delayed launch would seem to be a good hit superficially, it only proves that the firm is aware of the market realities and capable of adapting.
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If VinFast can organize its dealerships, maintain prices competitive, and provide good service, it can succeed in India in any case. Indian buyers are slowly warming to electric vehicles, thanks to the government's clean transport initiative and increasing fuel prices. There is demand, but trust and attention are top priorities. If VinFast gets the basics right in the beginning, it may be able to become a trusted brand in the long term.
The next few months are going to be critical for the brand. Its first impression, consumer reactions, and ability to live up to commitments will decide the success of its innings in India.