Geely’s ambitious plan is to construct a US$168-million manufacturing plant in northern Vietnam is set to unfold as scheduled, despite broader concerns cast by its chairman and founder, Li Shufu. Just last Saturday, Shufu pointed out the global automotive industry is grappling with a “serious overcapacity,” leading Geely to pause new plant constructions and expansions at existing facilities, according to British news agency Reuters.
The Vietnam plant is a collaboration between Geely and local distributor Tasco, with Geely holding a significant 64% stake. Groundbreaking is slated for this quarter in Thai Binh Province, where a sprawling 30-hectare site will eventually operate at a capacity of 75,000 vehicles annually in its initial phase.
These vehicles will include models from Geely and its Chinese counterpart, Lynk & Co, specifically designed to cater to domestic demand and facilitate exports to countries with free trade agreements with Vietnam. The factory holds the potential for future expansion as it may begin assembling a wider variety of Geely vehicles.
All cars produced at the plant will be constructed from “completely knocked down” kits—meaning they are assembled from parts sourced from various locations. The first vehicles are expected to hit the Vietnamese market early next year, while Geely currently offers the Coolray CUV imported from Malaysia.
Geely is a prominent player in China’s automotive sector, boasting a diverse portfolio that includes brands like Zeekr and Galaxy, along with a stake in the premium Swedish manufacturer Volvo. With 22 factories in China and three spread across the globe, Geely’s growth ambitions are clear.
Interestingly, Geely isn’t the only Chinese automaker eyeing Vietnam. Chery, another industry titan, plans to break ground on their own factory in Thai Binh Province in the third quarter through its partner Geleximco. With an investment of $800 million, Chery’s venture will focus on producing Omoda and Jaecoo models, with other potential vehicles in the pipeline.
While Chery sets its sights on this strategic investment, major players such as BYD and SAIC have also explored opportunities in Vietnam but have yet to make significant moves. At present, the majority of Chinese passenger vehicles sold in Vietnam are imported from China, Thailand, or Malaysia.
In a noteworthy development, the number of Chinese automotive brands in Vietnam jumped to 14 last year, surpassing Japan’s nine for the first time. However, their market presence remains relatively small compared to established Japanese and Korean brands, as well as the domestic contender, VinFast.
As Geely prepares to roll out its manufacturing plant, the automotive landscape in Vietnam is likely to get even more interesting—where the thrill of competition could soon turn up the heat among industry giants.
What is Geely’s investment in the Vietnam plant?
Geely is investing US$168 million in its new manufacturing facility in northern Vietnam.
What models will be produced at the new plant?
Initially, the factory will produce vehicles from Geely and Lynk & Co, catering to both domestic and export markets.
When will the first vehicle arrive for Vietnamese consumers?
The first vehicle is expected to be available to Vietnamese customers early next year.
