Chery, China’s leading electric vehicle manufacturer, is making a significant strategic move. It will be the first Chinese company to establish a manufacturing facility in Vietnam, a country poised to double its electric vehicle sales in the next decade. The $ 800 million plant, a joint venture between Chery’s Omoda&Jaecoo unit and Vietnamese company Geleximco, is set to open in 2024. The facility will produce a range of electric vehicles, from middle to luxury segments, aiming to capture a significant share of Vietnam’s emerging EV market.
The deal marks the return of Chinese carmakers to Vietnam, which was once a significant export market for them but later became a challenge because of poor quality and design that turned off consumers. It also follows the government’s call to increase the consumption of new energy vehicles in Vietnam.
Vietnam is a fast-growing market for automakers and the world’s second-largest car producer. Toyota held the top position with a 22% share in 2022, followed by Hyundai (17%), Kia (10%), Mitsubishi (10%), Honda (7%), and Mazda (7%).
The establishment of the new plant is a significant step for Geleximco, one of Vietnam’s top 10 private corporations. It marks the company’s entry into the electric vehicle business, a move it believes will boost the local economy and create job opportunities for thousands of workers. This positive outlook was expressed in a statement following a signing ceremony with Chinese officials in Hanoi.
Geleximco, one of Vietnam’s top 10 private corporations, operates in industrial production, infrastructure—real estate, and banking and finance, among other areas. It has invested in several projects abroad, including a joint venture with China’s Dongfeng Nissan to make a compact fuel cell-powered SUV called Venucia in Guangzhou, the capital of south China’s Guangdong province.
In addition to building and assembling vehicles, the joint venture will produce automotive components to supply local automobile assembly factories and export-oriented partners. He said that that will reduce the nation’s reliance on imported automotive parts.
The new plant will be located in Geleximco’s Hung Phu industrial park in the northern Thai Binh province. It will be developed in phases, with the 50,000-unit first phase (2024-2030) aiming to meet demand in the domestic market. It will produce 100,000 units yearly in the second phase (2031-2033) and 200,000 units in the third stage (2034-2035).
The factory will use locally developed parts and cooperate with the Vietnamese manufacturer TC Motor to assemble some models of Skoda vehicles, which the local company distributes and sells in Vietnam. He said that the companies would also work together on research and development. They will start with several vehicles, including the pure electric competent crossover SUV Omoda E5 and the JAECOO 7 PHEV. He added that they will then gradually expand their production capacity as demand increases. He said the plant will be built with a total investment of VND19 trillion ($800 million). The two firms will complete land and infrastructure rental procedures and begin plant construction in 2024.
