Vietnam’s electric car maker VinFast has asked India to reduce import duties on its cars in about two years so customers can become familiar with its products while local manufacturing plants come online, a top executive said on Sunday.
VinFast India CEO Pham Sanh Chau told Reuters that VinFast has started building a factory in the southern state of Tamil Nadu and hopes to start production by the middle of next year, first for domestic sales and then exports.
VinFast and Tamil Nadu said last month they had agreed to invest up to $2 billion (roughly Rs. 16,577 crore) in the effort and planned to commit $500 million (roughly Rs. 4,144 crore) over the first five years of the project.
Like Tesla, VinFast has also demanded a reduction in India’s 100% import tariff on complete electric vehicles, but has been opposed by domestic automakers. India, the world’s third-largest auto market, has been considering the requests but has not yet made a decision, a government official said last month.
A government spokesman did not immediately respond to a request for comment.
Pham Sanh Chau said on the sidelines of VinFast’s groundbreaking ceremony in Thoothukudi district: “We… are proposing to reduce import tariffs… for example, to 70 to 80 percent within two years and for a very limited number of cars to allow customers to get used to our products.”
“The central government is still considering it. But while waiting for the final decision from the central government, we will continue to move forward with the construction of the production facilities.”
Last year, electric models accounted for only about 2% of Indian car sales, but the federal government aims to reach 30% by 2030 and is working on a plan to attract electric car manufacturers.
According to VinFast, the Tamil Nadu project will have an annual production capacity of up to 150,000 vehicles, while the main plant in Vietnam has an annual production capacity of 250,000 vehicles.
Former Vietnam ambassador to India Pham Sanh Chau said the company has established a sales network by working closely with about 55 Indian dealers and may also consider selling its two-wheeler models in the country later.
“As a startup, we move quickly,” he said.
© Thomson Reuters 2024