Hyundai Grand i10 assembled in Vietnam in 2017

Grand i10 is one of the first products to switch from import to assembly according to Hyundai Thanh Cong's new strategy.

Hyundai Thanh Cong currently distributes 8 car models in Vietnam: Accent, Elantra, Sonata, Grand i10, i20 Active, Creta, Tucson and Santa Fe, of which only Santa Fe and Elantra are assembled, accounting for about 20%, the rest are imported.

Hyundai Thanh Cong's new strategy is to shift from mainly importing to mainly assembling, a similar move to what Truong Hai is doing. The rest of the industry tends to shift from assembling to importing.

Grand i10 will be assembled in Vietnam in 2017. Photo: Le Thang.

Hyundai Thanh Cong and the Korean Hyundai Group signed a joint venture agreement to contribute capital to expand production and assembly of Hyundai-branded cars in Vietnam. Currently, the joint venture is still using Hyundai Thanh Cong's old factory in Ninh Binh with a capacity of about 40,000 cars per year to assemble cars. Later this year or early next year, the joint venture will start construction of a new factory.

In 2017, the company will increase the assembly rate to about 70-80% of the total number of car models and by 2018, it will be 90%. Of which, Grand i10 is one of the first products. Vietnamese customers can buy domestically assembled i10 cars in 2017.

This is a new step to help the Grand i10 have a more competitive price before the 2018 door is gradually opening. When the import tax rate for cars from ASEAN is 0%, if the i10 continues to import from India with an import tax of 70%, the ability to compete will be very difficult. Therefore, the i10 has switched to domestic assembly.

If the localization rate reaches 40% (within ASEAN), the Grand i10 assembled by Hyundai Thanh Cong can be exported back to countries in the region with the tax to these countries also being 0%. In addition to the i10, Tucson is also a name that can be assembled this year.

Hyundai Thanh Cong and Truong Hai have similar approaches when they form joint ventures with their parent companies to open automobile manufacturing and assembly plants in Vietnam, with the hope of turning Vietnam into a regional hub for exporting Hyundai and Mazda-branded vehicles. The common point of both groups is that they do not have large-scale factories in Southeast Asia.

According to VNE