Rising Asia

New Vietnamese carmaker powered by German engineering

vinfast, vingroup, german cars made in vietnam
Vietnam definitely needs more cars. Source: Bloomberg

When the Paris Auto Show opens its doors this week, a new country will be represented among the automakers: Vietnam. The new VinFast cars, the pet project of billionaire Vietnamese industrialist Pham Nhat Vuong, are based on licensed BMW models and powered by German technology.

“The assembly is almost 100 percent German,” said Vo Quang Hue, deputy chief of Mr. Vuong’s Vingroup and a former manager at BMW and Bosch Vietnam. Vingroup is investing $3.5 billion in the project, with the lion’s share going to German companies.

The engine and chassis of VinFast cars are based on an older BMW 5 Series, and nearly half of the components are German. The metal presses come from the Schuler plant construction firm, the assembly line from Eisenmann, engine assembly from the Grob Group, the painting system from the Dürr Group, assembly robots from ABB Germany and networking from Siemens.

vinfast, vingroup, german cars made in vietnam
This may look familiar to BMW 5 Series drivers. Source: VinFast

Vingroup’s headquarters in northwest Vietnam looks like an UFO that has just landed. It was designed by Henn, the German architectural firm responsible for BMW’s Innovation Center in Munich and Porsche’s Design Studio. For the actual car design, VinFast turned to legendary Italian designer Pininfarina.

As the first Vietnamese carmaker, VinFast has ambitions not only for the domestic market — currently dominated by Chinese, Japanese and South Korean vehicles — but also on export markets across Asia. Line production is to begin next summer, and the factory under construction will be able to produce 250,000 vehicles a year — equal to current annual car sales in Vietnam. By 2025, the company plans to manufacture 500,000 vehicles a year. Further down the road, VinFast plans to manufacture electric vehicles and has a licensing agreement with Siemens for electric bus engines.

VinFast’s ability to partner with foreign automakers speaks well for its future success, said Titikorn Lertsirirungsun, Southeast Asia manager for consulting firm LMC Automotive. “Because of its close cooperation with BMW, VinFast has a big advantage, for example, in comparison with Proton,” he said, referring to the government-supported carmaker in Malaysia, which never achieved international success.

Frederic Spohr covers Southeast Asia and India for Handelsblatt. He’s currently based in Bangkok. Darrell Delamaide adapted this story into English for Handelsblatt Global. To contact the author: spohr@wpbangkok.com.

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