Vietnam’s Industrialization Ambitions: The Case of Vingroup and the Automotive Industry
- About the Book
Vietnam has officially admitted its failure to achieve industrialized economy status by 2020. This failure is partly due to its inability to grow a strong local manufacturing base and develop key strategic industries.
The participation of Vingroup, the country’s largest private conglomerate, in the automotive industry has sparked new hopes for Vietnam’s industrialization drive. The company, through its subsidiary Vinfast, aims to become a leading automaker in Southeast Asia with an annual capacity of 500,000 units and a localization ratio of 60 per cent by 2025.
Challenges that Vinfast faces include its unproven track record in the industry; the limited size of the national car market; the lack of infrastructure to support car usage in Vietnam; the intense competition from foreign brands; and its initial reliance on imported technologies and know-hows.
- Le Hong Hiep is fellow at the ISEAS–Yusof Ishak Institute, Singapore, and lecturer at the Faculty of International Relations, Ho Chi Minh City University of Social Sciences and Humanities.