Historically, Vietnam was not often associated with industrial or manufacturing prowess. However, this narrative is being reshaped by giants like Vingroup, whose automotive arm, VinFast, is spearheading the country’s industrial transformation.
For decades, Vietnam’s domestic automotive industry grappled with significant challenges. The market was small, production capabilities remained limited, and there was heavy reliance on foreign manufacturers. Localization rates were consistently low, supply chains lacked integration, and local firms struggled to gain the expertise needed to compete globally. Most vehicles were either imported or assembled domestically under foreign licenses, reflecting a market constrained by both infrastructure and ambition.
This changed with the arrival of VinFast—a homegrown Vietnamese car brand that has risen to dominate the domestic market, becoming the best-selling automotive brand in Vietnam during the first ten months of the year. The emergence of VinFast serves as a powerful case study in how conglomerates like Vingroup are advancing Vietnam’s industrialization.
Launched in 2017, Vingroup envisioned VinFast as a national car brand capable of competing on the global stage. In just 21 months, the company completed its state-of-the-art 335-hectare manufacturing complex in Hai Phong. The brand’s first models—a sedan and an SUV—debuted at the 2018 Paris Motor Show, ushering in a new chapter for the country’s industrial landscape.
VinFast’s rise has been marked by its rapid transition to electric vehicles (EVs), aligning with global trends toward sustainability. Today, VinFast’s EV lineup dominates the Vietnamese market, while recent expansions into international markets, including the Middle East, underscore its ambitions.
Vingroup’s ventures in carmaking and other technological and industrial endeavors exemplify a broader shift in Vietnam’s economic aspirations. This shift represents an effort to transition from a resource-based economy to one driven by high-tech innovation. If Vingroup’s efforts succeed, they could signal a critical turning point for the nation, transforming Vietnam from an economy reliant on low-cost labor to one characterized by industrial sophistication and technological advancement.
The emergence of companies like VinFast has proven to be a key driver of economic growth, bringing multifaceted benefits to Vietnam. Research indicates that every job in automotive manufacturing generates approximately 14 indirect jobs through supplier demand and increased local spending[1]. This ripple effect has revitalized local economies, supported ancillary industries, and contributed significantly to Vietnam’s GDP growth. VinFast’s Hai Phong manufacturing complex has also become a hub of activity, fostering a growing network of suppliers and auxiliary industries.
Additionally, one of the most impactful contributions of the company has been its role in technology transfer. By collaborating with global engineering firms and adopting advanced manufacturing techniques, VinFast has introduced cutting-edge practices to Vietnam. This has not only enhanced local capabilities but also set a precedent for other industries to follow.
At the same time, Vingroup’s transition from traditional sectors like real estate to technology-intensive industries highlights its determination to remain relevant in an evolving global economy. By publicly declaring its ambition to become a technology-driven company by 2028, Vingroup has made it clear that VinFast will play a pivotal role in achieving that vision.
Through VinFast, Vingroup has demonstrated that Vietnam is capable of leading innovation, not merely following global trends. By fostering industrialization and driving innovation, the company has set a powerful example of what can be achieved with vision, strategy, and determination. VinFast’s journey reflects not only the aspirations of a corporation but also the hopes of a nation on the rise.
[1] https://kenaninstitute.unc.edu/commentary/electric-vehicles-new-cars-new-regions-and-new-challenges/#:~:text=Research%20suggests%20that%20for%20every%20one%20motor%20vehicle%20manufacturing%20job%20created%2C%20about%2014%20indirect%20jobs%20are%20created%20through%20the%20demand%20for%20suppliers%20and%20spending%20in%20the%20local%20economy.