VinFast revises product strategy in India over cost concerns

A year after entering the Indian car market, VinFast is taking a step back from its original product strategy and exploring a new approach. Unable to meet local manufacturing cost targets for its global models, the company is now shifting to market-specific products.

Image: Sagar Parikh

Under its new strategy, VinFast is initially evaluating two models codenamed VF X and VF Y for India, as per a new report from _Reuters_. The company sees the VF X as a potential entry-level model priced under US$12,000 (~€10,350 euros / 1.15 million rupees).

The VF X could be smaller than the VF 6 but a little bigger than the VF 3, and potentially even an SUV designed to compete with Tata Motors’ Punch.ev or Nexon.ev. In other Asian markets, VinFast already sells an electric SUV similar in size to the latter, the VF 5. The report suggests that design work for the VF X is underway, but achieving the intended dimensions while keeping costs within budget is proving to be a challenge.

VinFast is involving Indian suppliers from the outset in the development and plans to use existing components and tooling where possible to control costs. Last month, company executives visited India to discuss its plans for the market with around 200 local suppliers.

Currently, VinFast offers two models in India: VF 6 and VF 7. The company imports knocked-down kits of both models and assembles them at a plant in Thoothukudi, Tamil Nadu. The local factory has an annual production capacity of 50,000 EVs, with a provision to expand to 150,000 units. Demand is far from meeting even the installed capacity. The company launched both models simultaneously in September 2025 but has sold only about 10,000 EVs so far.

VinFast was preparing to move from knocked-down assembly to manufacturing for the VF 6 and VF 7 and planned to manufacture the VF 3 also locally. However, it determined that the localisation plans for these global products would not meet its cost targets. In July, the company asked suppliers to pause all development work related to the three models and share details of investments requiring payment or reimbursement.