Vingroup Officially Began Construction Of The VinES Battery Manufacturing Factory
The People’s Committee of Ha Tinh Province and Vingroup officially began construction of the VinES Battery Manufacturing Factory in the Vung Ang Economic Zone (Ha Tinh).
The facility is backed by VND 4,000 billion (nearly 173.7 million USD) in investments and is being developed on 8 hectares in its initial phase. The establishment of this factory represents an important milestone in VinFast’s strategy of self-production and supply of batteries with global standards for its electric vehicles.
The VinES Battery Manufacturing Factory will provide Lithium batteries for VinFast’s electric cars and buses. In Phase One, the factory will scale 8 hectares, funded by a total investment of more than VND 4,000 billion. The entire infrastructure of the factory, including a casting shop, a welding shop, and a packaging (battery pack) shop, is designed to produce 100,000 battery packs per year. Phase Two of the factory will expand production to include battery cells manufacturing and upgrade capacity to 1 million battery packs per year.
This very first and most advanced battery plant in Vietnam will be equipped with European and American-standard technologies that boast an astounding workflow automation rate of 80%. Vingroup is also working with strategic partners, include world’s leading companies in pioneering technologies for the production of electric vehicle batteries.
Speaking at the groundbreaking ceremony, Mr. Nguyen Viet Quang, Vice President & CEO of Vingroup noted: “The research and construction of this battery manufacturing factory in the Vung Ang Economic Zone reflect our efforts to establish a clean energy ecosystem that contributes to the localization of VinFast’s supply. Furthermore, we have been promoting collaboration with many prestigious partners around the world, including firms in the US, Israel, Taiwan, China and more, to research, develop and apply cutting-edge battery technologies such as super-fast charging, 100% solid-state batteries and highly advanced battery materials.”
The construction of the VinES Battery Manufacturing Factory marks a significant step in implementing Vingroup’s “three-pillars” battery strategy, including procuring batteries from the world’s top manufacturers, collaborating with partners to produce the world’s best batteries and conducting in-house research and development for battery production.
This is a key strategy in VinFast’s goal of becoming a global smart electric vehicle company. With this, VinFast will be able to provide a wide range of batteries that are suitable for each of its electric vehicle lines, fulfill growing demands in the Vietnamese and global markets. The importance of this battery factory in VinFast’s global expansion plan is especially significant given its recent introduction of two electric car models, the VF e35 and VF e36, at the Los Angeles Auto Show last November.
Deputy Secretary of Provincial Party Committee and Chairman of the People’s Committee of Ha Tinh Province Vo Trong Hai expects VinES Battery Manufacturing Factory to contribute to local socioeconomic development.
According to Ms. Thai Thi Thanh Hai, Vice Chairwoman of Vingroup and Vice-Chair of Board of Members of VinFast, “This is in the focus of VinFast’s localization strategy of supply. The strategy enables us to own our supply chain of batteries and parts and to keep VinFast at the forefront of battery technology innovation. This, in turn, helps us provide high-quality products at reasonable prices and drive the movement of the global smart electric vehicle revolution.”
Once operational, the project is expected to attract thousands of domestic and foreign workers and contribute to accelerating industrial production in Ha Tinh Province.
Vietnamese President Nguyen Xuan Phuc spoke about Vingroup’s new battery factory:
Speaking at the groundbreaking ceremony of VinES Battery Manufacturing Factory, Vietnamese President Nguyen Xuan Phuc congratulated Vingroup and shared the conglomerate’s new vision in making a timely switch in its investing strategy from real estate to industry, service, and especially advanced technology, with VinFast automobile manufacturing complex, smartphone production and now a new battery factory.
“This is not only a very encouraging development for big Vietnamese corporations but also a meaningful event that will encourage small and medium enterprises to connect with value chains that are shaping the future,” the Vietnamese President stressed. “Vingroup’s switch in its strategy has shown its strong and direct involvement in Vietnam’s economic restructuring and modernization to enter a new growth path with higher productivity, more advanced technology and more added values.”
Vietnamese President Nguyen Xuan Phuc highly praises Vingroup’s strategy of becoming a leading industrial-technological conglomerate, with VinFast automobile manufacturing complex and VinES Battery Manufacturing Factory.
President Nguyen Xuan Phuc also stated: “With its proactiveness in acquiring and developing technologies to produce battery – a key component of EV, VinFast will quickly realize its goal of becoming a global smart electric vehicle company. Being able to self-produce and supply will enable VinFast to provide a wide range of batteries that are suitable for each of its electric vehicle lines, fulfill growing demands in the Vietnamese and global markets and contribute to the global EV revolution.
The success of VinES Battery Manufacturing Factory will greatly contribute to the development of a modern and sustainable economy. Vingroup has taken the advantage of being a successor to choose the most advanced technology. This is a decisive, brave and commendable choice. Vingroup’s success in turning into an industrial, technological conglomerate will not only inspire other Vietnamese corporations but also play an important role in establishing a ‘Make-in-Vietnam’ ecosystem of production, recycling and reuse of renewable energy battery.
I expect Vingroup to become a leading technology corporation that invests in research and development of new technologies, pioneers in innovation and succeeds in the global market.
On this occasion, I would like to thank Vingroup for providing cities, provinces and government agencies with donations and support worth more than 10 trillion VND, thereby extending timely aid to many people in difficult times”.
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Vingroup To Produce Ventilators And Body Thermometers In The Fight Against COVID-19
Vingroup has announced it would produce (invasive and non-invasive) ventilators of all types and body thermometers to the domestic market. This is in response to the call of the General Secretary, the President, the Prime Minister of Vietnam for the whole country’s participation in supporting the Covid-19 fight.
READ: Auto Sector Faces Biggest Existential Crisis Since 2007-09
Research Institutes will stop daily tasks and focus on finding and researching methods to produce ventilators. The units assigned the main responsibility include Automobile R&D Institute 1, Automobile R&D Institute 2, Mobile Device Research Institute, Smart Home Appliances R&D Institute, Telecommunication Equipment R&D Institute, Smart Battery R&D Institute, VinFast Automobile Factory and VinSmart Electronics Equipment Factory.
READ: Ford & Toyota—First Automakers To Suspend Production In Vietnam Due To Covid19
Vingroup has entered a license agreement with US-based Medtronic to use their design for the PB560 invasive ventilator and at the same time began researching a non-invasive ventilator based on the community-shared design by Massachusetts Institute of Technology (MIT). The group estimated the component cost for a non-invasive ventilator at about VND22 million and for an invasive ventilator at VND160 million.
READ: Bosch Cutbacks Operations In Response To Falling Automotive Demand
“Vingroup has an advantage of having both automobile factory and electronics factory which enable us to manufacture both large and mechanical parts as well as rare and smaller parts at the same time such as electronic boards. Our excellent design engineers are capable of transforming the conceptual and 2D designs into detailed and complete designs required by the manufacturers,” said Mrs. Le Thi Thu Thuy, Vice Chairwoman of Vingroup.
READ: HP Inc. And Partners Battles COVID19 With 3D Printing Solutions
“With the capacity of VinFast and VinSmart factories, the group can produce up to 45,000 non-invasive ventilators and 10,000 invasive ventilators per month and we can support other manufacturers around the world by processing equipment for them, or providing part of the demand – any specific quantity depending on their ability to supply components,” said CEO of Vingroup Nguyen Viet Quang.
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Vietnam’s First Domestic Car To Be Available In August 2019
VinFast, a unit of Vietnam’s largest conglomerate Vingroup JSC VIC.HM, is set to become the country’s first fully-fledged domestic car manufacturer as the company is projecting to have its first car available commercially in August of 2019.
Currently, the company already has established a new plant in the northern Vietnamese port town of Haiphong, where two models will be built. And for a start, VinFast is looking to manufacture 250,000 cars annually in the next five years of production. This is equivalent to 92 percent of all the cars sold in Vietnam in 2017 according to data collated by the Vietnam Automobile Manufacturers’ Association (VAMA). To add to this, the company has earmarked about USD 3.5 billion for the project and has even debuted two vehicles at the Paris Motor Show in 2018. Commenting on the company’s ambitions, Jim Deluca, CEO of VinFast has said that, “[VinFast is] looking to expand both within ASEAN and outside.”
Beyond these vehicles, VinFast also intends to move forward with a city car through a partnership with General Motors that will also extend to automotive sales, where General Motors has given VinFast exclusive distribution rights for Chevrolet-branded vehicles in Vietnam. Other technology agreements are also underway between VinFast and General Motors and this will add on to VinFast’s expanding portfolio of partnerships such as the company’s current partnership with Siemens for the development of domestic electric buses.
As of now, a majority of the cars sold in Vietnam are foreign brands assembled in the country from kits. However, a series of free trade agreements have reduced import duties and this has opened up the market for domestic manufacturers. For example, a 30 percent import tax on cars from other Association of Southeast Asian Nations (ASEAN) countries was removed in 2018.
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VinFast To Manufacture Made-In-Vietnam Cars For Global Market
VIETNAM: Vingroup, Vietnam’s largest private corporation, is looking to add automobile production into its impressive repertoire – one which already covers the non profit sector as well as the real estate, shopping, amusement park, convenience shop and housebuilding industry.
During this year’s Paris Motor Show the company had unveiled two of its LUX vehicles – an all-new sedan and a crossover inspired by the Vietnamese people – and plans to go global with its production output in the future. Based on a novel architecture that was developed by VinFast, the LUX vehicles were co-created alongside global leaders such as Magna Steyr and Bosch with the intention of an expedited development-to-market cycle.
Kevin Fisher, Vice President of Engineering at VinFast has said, “Our partnership strategy will enable us to achieve two crucial engineering imperatives – quality and timing”.While prototype testing of the two vehicles that have been showcased is currently underway, VinFast’s automobile manufacturing facility in Vietnam is already opened for operations and the company intends to develop a city car through its partnership with General Motors (GM) while also expanding its eScooter line through the addition of a small electric car by 2019.
Through its partnership with GM, VinFast has also attained exclusive distribution rights for Chevrolet-branded vehicles in Vietnam. Similarly, although additional technology agreements between GM and VinFast are still being discussed, most of GM’s operations in Vietnam will be transferred to VinFast, such as the company’s large Hanoi plant which is scheduled to be transferred before the end of 2018.
Moving forward, VinFast is also collaborating with Siemens to manufacture electric buses for the Vietnamese market which are scheduled to be sold domestically in June 2019. A vision that is aligned to VinFast’s supply chain for electric mobility in its operations.
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The Automotive Market of Vietnam and The Philippines
With a relentless implementation of new technologies combined with a surge in investment deals, it is not erroneous to say that the automotive industry in Southeast Asia is experiencing a positive transition. Before the proposed introduction of Vietnam’s VinFast, Malaysia was the only Southeast Asian nation that had its own national car, in the form of Proton. Having said this, the automotive market of not only Vietnam, but the Philippines has seen tremendous growth and should be lauded by the ASEAN community.
Automotive sector in the Philippines
According to a forecast by Frost & Sullivan, the number of new car sales in the Philippines (both commercial and passenger cars) will grow 11.5% to 576,959 units this year.
Over the next five years, the Philippine economy is expected to grow by 6-7% due to consumer expenditure and investment, with new car sales supported by strong economic improvement. The manufacturing industry in the country has expanded by over 7% since 2010. Participating in the automotive industry revitalisation initiative (Comprehensive Automotive Resurgence Strategy or CARS program), Toyota Motor Corporation and Mitsubishi Motors’ overseas subsidiaries will have a positive impact on local production capacity.
This automotive progress is facilitated by a pledge made by the Philippine government that will oversee a US$160 billion infrastructure upgrade in Manila. This initiative encompasses the building of roads that are of higher quality than before. President Rodrigo Duterte has also upped the ante by planning the construction of more highways that could offset traffic congestion in the capital. Such a move might potentially lead to an increase in car owners. It is also worth noting that 61 of the 75 important projects of the national infrastructure development plan or ‘Build Build Build’ relates to the automotive/transportation sector.
Automotive progress in Vietnam
With the car ownership rate in Vietnam at about 20 units per 1,000 people, the domestic automotive market has tremendous potential for further growth, with consumption-oriented, middle-income households being a catalyst for this shift. A report by Frost & Sullivan has highlighted that new car sales volume in 2018 is expected to grow to 256,000 units, up 6.8% from last year.
Furthermore, a steady elimination of tariffs for passenger cars through free trade agreements (FTA) will create positive ripples across the automotive pond, this year. Not only that, demand for commercial vehicles is expected to increase due to infrastructure development projects that are focused on road traffic.
According to Reuters, a point that could strengthen Vietnam’s current automotive success is the building of a car factory by Vingroup, the country’s leading property dealer in a project worth US$1-1.5 billion in the first phase. VinFast, Vingroup’s construction brand, is responsible for signing a Memorandum of Understanding (MoU) with Credit Suisse for the bank to extend US$800 million in financing the project.
However, there are potential challenges that might come to the fore, which could possibly hinder new car sales growth in Vietnam. The issuance of Decree 116, which was introduced in October of last year, has tightened controls for imported automobiles in terms of origin, types, technical safety, and environment protection requirements. As a consequence, automobile juggernauts like Toyota and Honda have announced a halt to exporting cars to Vietnam because they are unable to obtain a Vehicle Type Approval (VTA) certification issued by authorities in the exporting country.
This divisive clause may spell an end to small-scale auto importers in the country, as there will be minimal probability that international car manufacturers are agreeable to allowing an unofficial dealer to recall any of their products.
The expanding automotive sectors of both, the Philippines and Vietnam should be commended. The potential release of VinFast in Vietnam and Duterte’s proposed infrastructure plans in the Philippines could spur success for the automotive sectors of these two countries. The competition among automotive players in the region could possibly be the catalyst that propels ASEAN’s automotive industry to greater heights in the coming years.
