VinFast Auto, a unit of Vietnam’s largest private conglomerate VinGroup, this week held a ground breaking ceremony for a new battery electric vehicle (BEV) assembly plant in Indonesia to strengthen its sales in south-east Asia’s largest vehicle market.
The plant will be located in a new industrial zone near the West Javan city of Subang and will have capacity of 50,000 vehicles per year when it is completed in late 2025.
VinFast plans to invest an initial IDR3.2trn (US$200m) in the facility which will include body and paint shops plus a final assembly line. The company was understood to be planning to invest US$1.2bn in the long term.
The facility will produce right hand drive battery powered models, the VF3, VF5, VF6 and VF7, initially for the local market. VinFast began selling its VF5 and VF e34 BEVs in Indonesia earlier this year, imported from Vietnam, and continued to roll out its local sales network. The company also planned to launch a battery subscription service for its BEVs.
The ground-breaking ceremony was attended by Nguyen Dhuc Thanh, chairman of VinGroup, Temmy Wiradjaja, CEO of VinFast Indonesia, Indonesia’s presidential chief of staff Moeldoko and acting regent of Subang Imran.
Wiradjaja said: “This groundbreaking event takes place just a few months after VinFast's official entry into Indonesia. It underscores VinFast's strategic expansion and competitiveness in southeast Asia, marking a significant milestone in our strategy to become a leading player in one of the most promising electric vehicle markets in the region."
To help stimulate domestic demand and attract inward investment, the Indonesian government has suspended import duties on BEVs until the end of 2025 for companies investing in local production. BEVs with a local content of at least 40% also enjoy a discounted sales tax rate of 1% (instead of the usual 11%) until the end of 2024.
The government was targeting 50,000 BEV sales in the country this year. Sales in the first half of the year amounted to 11,930 units, mostly low cost Chinese models. The best seller is the 38kWh Wuling Binguo small car priced from IDR317m (US$19,950), with 3,615 deliveries year to date. Other key players include Chery with the Omoda E5, Hyundai with the Ioniq 5 and SAIC Motor with the MG ZS EV.
Other Chinese brands which have entered the market this year include BYD and GAC Group while Hyundai began production this month of the Kona Electric small SUV powered by batteries produced at its local joint venture plant with LG Energy Solution.
China’s Hozon Auto began local assembly of its Neta V-II BEV in June after its Neta V predecessor went on sale in the country in the fourth quarter of 2023.
