The project is part of Vingroup’s expansion plan into the heavy industry of Vietnam, its vice chairman was quoted as saying in a statement, following similar moves in other major sectors such as retail and health care.
Vingroup said it hopes to become a top car manufacturer in the Southeast Asian region, making 500,000 cars per year by 2025.
The company expects to produce 100,000-200,000 vehicles per year in the first phase, including five-seat sedans, seven-seat SUV and electric motorbikes.
Vingroup’s spokeswoman told Reuters the factory would introduce the first electric motorbikes in 12 months and first cars in 24 months.
Its construction brand VINFAST signed a memorandum to borrow $800 million from Credit Suisse AG to build the 335-hectare (827.8 acres) factory, located in Vietnam’s northern city of Hai Phong.
VINFAST plans to buy blueprints of car engines and main mechanical systems from top European and American designers.