General Motors Co has agreed to transfer its Vietnamese operation to domestic car manufacturer VinFast Trading and Production LLC, in a move the pair said will marry GM's automotive expertise with VinFast's local market insight. VinFast, a unit of Vietnam's biggest private conglomerate, Vingroup JSC, will be the exclusive distributor of GM's Chevrolet cars in Vietnam under a strategic partnership agreement, the pair said in a statement on Thursday.
GM will transfer full ownership of its Hanoi factory to VinFast for the Vietnamese automaker to produce small cars under a GM global licence from 2019, they said, without disclosing a value for the deal. "Our vision is to build an automobile manufacturing eco-system that will include assembly plants, local automotive suppliers and dealers, and a string of supporting industries," said VinFast Chief Executive Jim DeLuca. "Our plan is to launch a portfolio of five VinFast vehicles in 2019 and this strategic partnership is integral to that," he said.
Vingroup, which has businesses in retail, real estate, healthcare, education and hospitality, among others, set up VinFast last year to expand into the automobile sector.
VinFast, which is building a $1.5 billion car factory in the northern province of Hai Phong, plans to launch a sedan and sport-utility vehicle in the third quarter of 2019, and a small car, electric car and electric bus by the end of 2019.
Vietnam's automobile sales grew 24 percent in 2016 but fell 10 percent last year to 272,750 units, showed data from the Vietnam Automobile Manufacturers' Association. Sales fell 6 percent in the first five months of this year, the data showed. GM said on its website its sales of Chevrolet cars in Vietnam grew 8.5 percent last year to 10,576 units, its highest since launching in 2006 and giving the brand a 3.9 percent market share. That compared with sales growth last year of 34.5 percent in Indonesia and 25.7 percent in Thailand.
"The GM-VinFast strategic partnership will best position the Chevrolet brand and dealer network for long-term growth in Vietnam by leveraging GM's global scale and expertise, married with VinFast's domestic strength and insight," said Barry Engle, executive vice president and president of GM International.
"We are very excited about the opportunity to play a key role in developing the automotive industry in Vietnam," Engle said. The transfer, which includes GM's Hanoi plant, dealer network and employee base, is expected to be conducted by the end of 2018, the companies said in the statement.
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