General Motors will transfer its Vietnamese operation to VinFast Trading and Production and distribute Chevrolet cars through the local assembler, in a move that could help drive up its modest sales in the country, a media report said.

As part of the deal, VinFast, a unit of Vietnam's biggest private conglomerate - Vingroup JSC, would be exclusive Chevrolet distributor in Vietnam, Reuters said.

"The GM-VinFast strategic partnership will best position the Chevrolet brand and dealer network for long-term growth in Vietnam by leveraging GM's global scale and expertise, married with VinFast's domestic strength and insight," said GM International president Barry Engle said.

The transfer, which includes GM's Hanoi plant, dealer network and employee base, is expected to be conducted by the end of 2018, the companies said in the statement.

GM assembles Chevrolets in Hanoi from KD kits imported from South Korea. GM Korea is GM's biggest production base in Asia excluding China, Reuters noted.

The plant will be used solely to produce VinFast cars after the transfer while Chevrolet cars will be imported.

VinFast said this partnership with GM was "integral" to its plan to "launch a portfolio of five VinFast vehicles in 2019".

It is building a US$1.5bn factory in the northern province of Hai Phong and plans to launch a sedan and SUV in the third quarter of 2019, and a small car, electric car and electric bus by end-2019.

"Our vision is to build an automobile manufacturing eco-system that will include assembly plants, local automotive suppliers and dealers, and a string of supporting industries," VinFast CEO Jim DeLuca told Reuters.

Vietnam auto sales rose 24% in 2016 but fell 10% last year to 272,750 units, data from the Vietnam Automobile Manufacturers' Association (VAMA) showed. Sales fell 6% in the first five months of 2018.

While GM's sales in Vietnam have been rising since 2014, its numbers last year were only an eighth of the country's market leader, local Truong Hai Auto, and a sixth of runner up Toyota, Reuters said, citing VAMA data.

Sales of Chevrolet grew 8.5% to 10,576 units in 2017, lagging gains of 34.5% in Indonesia and 25.7% in Thailand, the report added.

Vietnam scraps ASEAN tariffs, but imports crash - ANALYSIS

Auto market intelligence
from just-auto

• Auto component fitment forecasts
• OEM & tier 1 profiles & factory finder
• Analysis of 30+ auto technologies & more