Vietnam’s VinFast began production at a $500 million electric vehicle plant in southern India’s Tamil Nadu state on Monday, part of a planned $2 billion investment in India and a broader expansion across Asia.
The factory in Thoothukudi will initially make 50,000 electric vehicles annually, with room to triple output to 150,000 cars. Given its proximity to a major port in one of India’s most industrialized states, VinFast hopes it will be a hub for future exports to the region. It says the factory will create more than 3,000 local jobs.
The Vietnamese company says it scouted 15 locations across six Indian states before choosing Tamil Nadu. It’s the center of India’s auto industry, with strong manufacturing, skilled workers, good infrastructure, and a reliable supply chain, according to Tamil Nadu’s Industries Minister T.R.B. Raaja.
“This investment will lead to an entirely new industrial cluster in south Tamil Nadu, and more clusters is what India needs to emerge as a global manufacturing hub,” he said.
VinFast Asia CEO Pham Sanh Chau said the company has aspirations to export cars across the region and it hopes to turn the new factory into an export hub.
The new factory could also mark the start of an effort to bring other parts of the Vingroup empire to India. The sprawling conglomerate, founded by Vietnam’s richest man Pham Nhat Vuong, began as an instant noodle company in Ukraine in the 1990s and now spans real estate, hospitals, schools and more.
Chau said Tamil Nadu Chief Minister M.K. Stalin had invited the company to “invest in a big way” across sectors like green energy, smart cities and tourism, and said that the chief minister had “promised he will do all what is necessary for us to move the whole ecosystem here.”
A strategic pivot to Asia
VinFast’s foray into India reflects a broader shift in strategy.
The company increasingly is focusing on Asian markets after struggling to gain traction in the U.S. and Europe. It broke ground last year on a $200 million EV assembly plant in Indonesia, where it plans to make 50,000 cars annually. It’s also expanding in Thailand and the Philippines.
VinFast sold nearly 97,000 vehicles in 2024. That’s triple what it sold the year before, but only about 10% of those sales were outside Vietnam. As it eyes markets in Asia, it hopes the factory in India will be a base for exports to South Asian countries like Nepal and Sri Lanka and also to countries in the Middle East and Africa.
India is the world’s third-largest car market by number of vehicles sold. It presents an enticing mix: A fast growing economy, rising adoption of EVs, supportive government policies and a rare market where players have yet to completely dominate EV sales.
“It is a market that no automaker in the world can ignore,” said Ishan Raghav, managing editor of the Indian car magazine autoX.
A growing EV market in India
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