In a significant move, Vietnam’s trade ministry announced on Thursday that Chery, a prominent Chinese automaker, had finalised a joint venture agreement with a local company to establish an USD 800 million manufacturing plant. This development marks Chery as the first Chinese electric vehicle (EV) manufacturer to venture into Vietnam’s automotive industry.
Joint venture and plant location
The joint venture, formed between Chery’s Omoda&Jaecoo unit and Vietnamese firm Geleximco, will oversee the construction of the manufacturing plant. Situated in the coastal province of Thai Binh, the facility aims to cater to the growing demand for electric vehicles in Vietnam.
Production capacity and models
With an annual capacity of 200,000 vehicles, the factory will focus on producing Chery’s OMODA and JAECOO electric models. The initial phase of construction is slated for completion by the first quarter of 2026, as outlined in the ministry’s statement.
Import of electric models
In the interim period before the plant’s completion, Chery plans to introduce two electric models into the Vietnamese market by the end of the year. This strategic move underscores the company’s commitment to establishing a strong presence in Vietnam’s evolving automotive landscape.
Expansion plans and global presence
While venturing into Vietnam, Chery is simultaneously exploring opportunities in other markets. The company is actively selling cars in Europe and contemplating the establishment of a manufacturing plant in Italy. These endeavours highlight Chery’s ambition to expand its global footprint and tap into diverse market segments.
Competition and industry dynamics
Chery’s entry into Vietnam’s EV market comes amid intensifying competition and evolving industry dynamics. China’s BYD, recognised as the world’s largest EV maker, has also expressed interest in establishing a manufacturing facility in Vietnam. However, recent reports suggest a potential slowdown in BYD’s plans, indicating the complexities involved in navigating the Vietnamese automotive landscape.
Strategic considerations and market trends
Chery’s decision to invest in Vietnam aligns with broader strategic considerations and emerging market trends. The country’s favourable regulatory environment, coupled with increasing consumer interest in electric mobility, presents lucrative opportunities for automakers seeking expansion.
Future outlook and growth prospects
As Chery embarks on its journey into Vietnam’s EV market, the future outlook appears promising yet challenging. The successful establishment of the manufacturing plant and the introduction of electric models will play a crucial role in determining Chery’s trajectory in the region. Additionally, navigating competitive pressures and adapting to evolving market dynamics will be imperative for sustained growth and success.