VinFast scales back India sales target, delays production and bookings

The rollout of VinFast's VF 7 and VF 6 models in India is expected to face a month's delay, attributed to the company's ongoing uncertainties around sales and distribution network in the country

Vietnamese electric vehicle (EV) manufacturer VinFast has scaled back its India sales expectations as it prepares to enter the country’s electric vehicle market later this year, The Economic Times reported on Monday. The automaker has reduced its initial annual sales target by a third, now aiming to sell 3,000 units in its first year in India, the report added.

 

The rollout of VinFast’s VF 7 and VF 6 models in India is also expected to face a one-month delay, attributed to the company’s ongoing uncertainties around sales and distribution network in the country, the report added, citing sources. Production at its upcoming manufacturing facility in Thoothukudi, Tamil Nadu — which was earlier scheduled to commence by the end of June — has also been deferred to July 30. Consequently, the company is expected to open bookings for both models in mid-July, with customer deliveries projected to begin by mid-August.

 

 

“VinFast’s full-fledged plans will unfold only next year when they introduce the VF 3, the company’s affordable SUV. This year will mostly be about making an entry and testing the market,” a source told The Economic Times.

 

Lack of clarity on pricing and dealer exits 

VinFast’s entry into India has been met with dealer hesitation. While the company initially appointed dealers across 40 locations, most have withdrawn their letters of intent, citing unclear strategies around distribution, pricing, and product positioning. Currently, only eight to ten dealers remain committed, The Economic Times reported.

 

One of the dealers who opted out told news platform that the company doesn’t seem to have clarity on how many sales touchpoints to have, what price point to launch the models at, and how many units to sell. “We couldn’t commit investment with this lack of clarity,” the dealer said.

 

“Since the auto expo, VinFast hasn’t done much on brand activation. Most are unaware of the brand in India,” said another dealer who withdrew the letter of intent.

 

 

VinFast’s India facility 

VinFast is setting up a $2 billion manufacturing plant in Tamil Nadu and is also in discussions with the governments of Andhra Pradesh and Telangana as it considers expanding its operations in India.

 

VinFast said that it plans to introduce its VF7 and VF6 electric models to Indian buyers before the upcoming festival season. The company is aiming for an annual production capacity of 150,000 electric vehicles from its Indian facility in the next few years, with plans to export vehicles to West Asia and Africa.

 

 

VinFast loses incentive scheme 

According to a report earlier this month, VinFast’s investment of $2 billion in Tamil Nadu did not meet the requirements to receive benefits under India’s ‘Scheme to Promote Manufacturing of Electric Passenger Cars’.

 

Government representatives clarified that, according to the scheme’s rules, only investments made and recorded in the company’s accounts after official approval are considered valid. This stipulation requires that any machinery or equipment be installed and operational only after the company has received formal clearance under the program. As a result, any funds spent or assets acquired before this approval are not eligible for incentives, according to a report by PTI.