The Hyundai Grand i10 was assembled in Vietnam in 2017.

The Grand i10 is one of the first products to switch from imported to locally assembled under Hyundai Thanh Cong's new strategy.

Hyundai Thanh Cong currently distributes 8 passenger car models in Vietnam: Accent, Elantra, Sonata, Grand i10, i20 Active, Creta, Tucson, and Santa Fe. Of these, only Santa Fe and Elantra are assembled locally, accounting for approximately 20% of the market share, while the rest are imported.

Hyundai Thanh Cong's new strategy is to shift from primarily importing to primarily assembling, a move that is the opposite of what Truong Hai is doing. The rest of the industry, however, tends to shift from assembly to importing.

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

Hyundai Thanh Cong and Hyundai Group of South Korea have signed a joint venture agreement to expand the production and assembly of Hyundai-branded vehicles in Vietnam. Currently, the joint venture still uses Hyundai Thanh Cong's old factory in Ninh Binh, with a capacity of approximately 40,000 vehicles per year, for assembly. Construction of a new factory will begin later this year or early next year.

In 2017, the company plans to increase the proportion of domestically assembled vehicles to approximately 70-80% of its total models, and to 90% by 2018. The Grand i10 is one of the first products to be assembled domestically. Vietnamese customers will be able to purchase the domestically assembled i10 in 2017.

This is a new move to help the Grand i10 become more competitively priced as the 2018 season approaches. With import taxes on cars from ASEAN countries dropping to 0%, importing the i10 from India with a 70% import tax would make it very difficult to compete. Therefore, the i10 is now being assembled domestically.

If the localization rate reaches 40% (within the ASEAN bloc), the Grand i10 assembled by Hyundai Thanh Cong could be exported back to other countries in the region with a 0% import tax. Besides the i10, the Tucson is also a model that could be assembled this year.

Hyundai Thanh Cong and Truong Hai have similar approaches, forming joint ventures with their parent companies to open automobile manufacturing and assembly plants in Vietnam, hoping to transform Vietnam into a regional export hub for Hyundai and Mazda vehicles. A commonality between these two corporations is the lack of large-scale factories in Southeast Asia.

According to VNE