800 million dollar factory in Vietnam

Chery/Geleximco joint production plant

The production plant, to be jointly established by Chery’s Omoda&Jaecoo unit and Vietnamese company Geleximco, will be located in the coastal province of Thai Binh, the ministry said in a statement following the signing ceremony. Thai Binh benefits from a strategic geographical location. In recent years, the region has been ranked among the states that performed well in economic growth across the country.

With a capacity of 200,000 vehicles per year, the plant will produce Chery’s OMODA and JAECOO electric models. The first phase of construction (of the three planned) is expected to be completed in the first quarter of 2026, the press release added.

Meanwhile, Chery, which also sells cars in Europe and plans to set up a factory in Italy, will import two electric models to Vietnam. These will be sold by the end of this year, according to the ministry.

Geleximco, with more than 30 years of experience in the investment and development of large projects, has emphasized its position in many areas, from real estate to infrastructure, including energy and technology.

Announcement already made in September 2022…

The project is not new… already in September 2022, Chery had announced that it wants to sell its first car made in Vietnam from 2023.

“We want to build a factory in Vietnam because we don’t just want to import and sell cars,” Chery Vietnam director Tocy Tang told VnExpress newspaper at the time.

The plant would allow Chery to “manufacture modified vehicles for the Vietnamese market and increase its capacity”, while strengthening the image of the Chinese car brand in Vietnam, he added.

BYD scales back in Vietnam

In late March, the manager of the industrial park where the plant would be built indicated that Chinese automaker BYD had slowed down its plans to build an electric car factory in Vietnam.

In May 2023, the Vietnamese government said that the Chinese electric car maker decided to build an electric car manufacturing and assembly plant in Vietnam’s Phu Tho province, where the company already has a factory to make Apple laptops.

“Due to its strategy and the decline in the electric vehicle market, BYD has slowed down (its plans) to start construction,” said Luong Thanh Tung, vice president of Gelex Group, the company that manages the industrial park where BYD would build a new factory.

Speaking at a shareholder meeting in Hanoi, Tung also recalled that after long negotiations, BYD agreed to reserve 100 hectares of commercial land in Phu Ha industrial park to build an electric vehicle factory. After the delay in negotiations, the two sides are now looking for the “right time” to start the project, the Vice President of the Gelex group had also indicated.

Our opinion, for leblogauto.com

Chery’s announcement is a big blow to BYD. Not only is its competitor moving ahead in Vietnam… but it is also questioning the validity of the arguments given to justify the decline of its project to establish a factory on the territory of Vietnam.

Sources: Reuters, Chery