Vingroup halves land rent for suppliers in five-year expansion push
Vingroup will apply a 30% discount on land rent for five years to suppliers that join its ecosystem, and will give them access to its logistics and deepwater port system. The move supports VinFast's production targets of 300,000 cars and up to 1.5 million electric motorbikes this year.
Vingroup, Vietnam's largest listed company, will cut land rent by 30 per cent for five years for suppliers that join its network, and will give them access to its logistics infrastructure and deepwater port system, Thai Thi Thanh Hai, vice chairwoman of Vingroup and global vice chairwoman of automaker VinFast, said at a conference on localisation and supplier development last Friday.
The conglomerate, controlled by Southeast Asia's richest man Pham Nhat Vuong, is seeking both domestic and foreign-invested suppliers operating in Vietnam. Its needs span automobiles, electric motorbikes, steel and robotics, as well as construction, infrastructure, energy and services. In energy, Vingroup requires wind turbine towers, electrical conductors, substations and related equipment, along with high-tech components and materials. Businesses in its supply chain also have opportunities to supply VinFast factories in India and Indonesia.
Weldcom Industry, a VinFast supplier for eight years, illustrates the potential for expansion. Ho Thi Nga, deputy general director of Weldcom, said its work has ranged from designing and installing electric motorbike production lines to serving as the main contractor for integrating automobile body production lines in Vietnam, India and Indonesia. Contracts between the two sides totalled more than US$200 million from 2018 to 2025.
"Technical standards, quality and deadlines are the biggest pressures when working with the Vietnamese automaker," Nga said. In return, suppliers such as Weldcom receive help establishing standards and opportunities to expand their factories and markets. Following its overseas projects with VinFast, Weldcom is now approaching other automakers in India, including Mahindra and Tata.
Similarly, Luong Duc Thu, chairman of Automech, said his company had shifted from supplying metalworking machinery to investing in factories producing components and assemblies for VinFast. It now supplies thousands of component types, primarily body parts, along with electric bus frames and some automotive assemblies. Automech generated revenue of around VND1.5 trillion (US$58 million) last year and expects that to rise to VND2 trillion this year. Its workforce has grown fivefold since it began working with VinFast and now exceeds 1,000.
"We receive support with workforce training and standardizing production processes and quality, but fulfilling orders requires us to continually invest in machinery and upgrade our systems," Thu said. The Automech chairman also outlined plans to open a factory supplying components to VinFast in India. "We have surveyed sites and are considering opening a factory. If Vietnamese businesses do not do it, international parts manufacturers will step in," Thu said.
Vingroup is expanding its supplier network to meet investment plans across multiple sectors. In vehicle manufacturing, VinFast is targeting at least 300,000 automobiles and 1.2–1.5 million electric motorbikes this year, with factories in Hai Phong, Ha Tinh, India and Indonesia. VinMetal expects to reach an annual steel production capacity of 6 million tons in 2027, rising to 20 million tons by 2030. VinEnergo is developing wind and solar power combined with battery storage, while VinSpeed is developing two high-speed rail routes: Hanoi–Quang Ninh and Ben Thanh–Can Gio in Ho Chi Minh City.
