VinFast supply-chain involvement over seven years has increased a domestic company's assets 12-fold, says Vingroup vice chairman

VinFast is positioning itself not merely as an automaker, but as a central “nucleus” for building Vietnam’s automobile production chain and strengthening supporting industries. Speaking at a seminar organized by Invest Magazine on April 13, titled “40 Years of Reform: The Leading Role of Economic Groups,” Lê Khắc Hiệp, Vice Chairman of Vingroup, discussed VinFast’s role in forming economic linkages and developing domestic supply capabilities.

From assembly dependence to an integrated production chain

Mr. Hiệp raised a core question for Vietnam’s long-term growth: when can the country develop domestically capable manufacturing industries that can lead and participate deeply in global value chains?

He said VinFast’s approach differs from a traditional assembly route. Instead, VinFast chose to build a highly automated production complex from the start, creating a foundation to shift from “dependent manufacturing” to “autonomous manufacturing.”

More importantly, VinFast is described as not developing in isolation. It is positioned as the core of the production chain, connecting and leading a network of suppliers. This model, according to the Vingroup leadership, has started to restructure Vietnam’s automotive sector toward domestic economic linkages.

Localization targets and control of core technologies

Mr. Hiệp cited localization progress for electric vehicles. By 2025, the localization rate of electric vehicles reached about 60%, with a target of 80% when battery cells are produced in Vietnam by 2026.

He said mastery of core technologies helps VinFast control the value chain, reduce reliance on external sources, and create space for domestic firms to participate more deeply. The leadership also argued that when a leading upstream enterprise holds core technologies, the surrounding ecosystem can develop in tandem, producing spillover effects similar to those seen in industrialized countries.

Supporting domestic suppliers through stable demand

Mr. Hiệp also highlighted VinFast’s role in addressing the “output problem” faced by domestic enterprises. He said that for many years, mechanical and electronic firms hesitated to invest due to the lack of a stable market.

VinFast, he said, has provided assurance through long-term and large-scale collaborations. With stable orders, suppliers can invest in machinery, upgrade technology, and expand production.

Raising standards to meet global market requirements

Participation in VinFast’s supply chain—aimed at global markets—has also required suppliers to upgrade comprehensively, including technical standards, quality management, and sustainable development criteria. Mr. Hiệp said this process helps suppliers meet VinFast’s requirements while improving their competitiveness to participate in other international value chains.

Example of supplier growth

As evidence of the supply chain’s effectiveness, Mr. Hiệp cited an example from a localization workshop held at the VinFast Hai Phong factory at the end of 2024. He said a domestic partner that had been forging body stamping since 2017 saw its asset size rise 12-fold after seven years in VinFast’s supply chain.

Industrial cluster formation and remaining challenges

In addition, Mr. Hiệp said VinFast plays a catalytic role in forming industrial clusters through large-scale supplier connection programs and supportive policies for enterprises in the chain.

However, he noted that forming economic linkages and developing supporting industries still faces challenges. Domestic enterprises’ capabilities are not yet uniform, capital and R&D investment needs are large, and competition from international suppliers is intensifying as Vietnam continues to open further.