VinFast Suspends Plans To Manufacture VF3, VF6 and VF7 EVs in India Amid Cost Review: Report
Vietnamese EV maker VinFast has suspended local manufacturing plans for three models - the VF3, VF6, and VF7 - and ordered suppliers to halt development work while reassessing costs. The setback comes as the company navigates cost targets in India's competitive auto market. Scroll below to know more.
Vietnamese electric vehicle maker VinFast has suspended its plans to manufacture three models locally in India and instructed suppliers to halt ongoing development work as the loss-making automaker reassesses project costs, according to a company memo and sources familiar with the matter.
Suspension of Local Production Plans
The manufacturer has directed suppliers to "hold all activities" concerning three key vehicle programs. These include the VF3 - a two-door SUV initially expected to be its most competitive offering in the country - alongside the VF6 and VF7 SUVs, which are currently imported as kits from Vietnam and assembled locally in India, reports Reuters. Audi Q3 Bookings Open in India Ahead of Festive Launch; Check Price, Engine and Features.
The move marks a fresh hurdle for VinFast, which turned its focus toward India's vital growth market after encountering difficulties gaining significant market share in the United States and Europe. While the company has publicly stated its intent to increase local sourcing through partnerships with domestic suppliers, the specific plans to manufacture the VF3, VF6, and VF7 within the country had not been previously disclosed.
A company representative addressed the strategic adjustment in a statement to Reuters: "India is an important market in VinFast's long-term business and manufacturing strategy." The representative added that the company is making "appropriate adjustments" to its products based on ongoing market research and consumer feedback to "better meet the needs of Indian customers".
Impact on Supplier Investments and Operations
In a July memo distributed to parts suppliers, VinFast announced its decision to "temporarily" put on hold all development work tied to localising parts for the VF3, VF6, and VF7 models. Developing components domestically would have allowed the automaker to avoid expensive imports and price its vehicles more competitively. However, one source noted that VinFast failed to meet its targeted cost structures for developing local parts, prompting the suspension. As part of the directive, the company requested suppliers to submit a comprehensive breakdown of the "total amount invested to date" on the affected projects, including expenses requiring reimbursement across tooling, engineering, and materials, backed by "supporting documentation where available."
Background and Market Context
Backed by Vietnam's largest conglomerate, Vingroup, VinFast officially entered the Indian market in September 2025 by launching its VF6 and VF7 electric SUVs. The company's southern India facility boasts an initial annual production capacity of 50,000 cars, scalable up to 150,000 units. To date, the automaker has sold approximately 10,000 vehicles in the country, including sales to its affiliate ride-hailing firm, Green SM. Upcoming Bike Launches in September 2026: Royal Enfield Himalayan 440 and Simple Wave to Triumph Bonneville 350 and Others.
VinFast's struggles to secure a foothold in the world's third-largest car market mirror broader challenges faced by other foreign automakers, such as Volkswagen and Nissan, which similarly struggled to achieve the scale managed by dominant market leaders like Suzuki and Hyundai. Despite pausing local manufacturing initiatives for the three models, VinFast confirmed that it has not changed or suspended operations for the VF6 and VF7 units currently on sale, which will continue to be assembled at its local factory using imported kits.
(The above story first appeared on LatestLY on Sep 01, 2026 03:37 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).
