Ground Floor: Vietnam To Build Chinese Cars

Date posted: 03-12-2007

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Lifan Motor of China will be building the 520 hatchback in Vietnam. The company is expected eventually to export vehicles throughout Southeast Asia. (Photo courtesy of Lifan)

EDMUNDS | HANOI — Lifan Motor, a relative newcomer to the China auto industry, has beaten its older, larger and more established counterparts into a new market: Vietnam.

Chongqing-based Lifan and local partner Vietnam Motors announced plans to assemble the Lifan 520, a compact hatchback that will sell for about $16,000. The partners expect to sell some 2,000 cars this year and eventually plan to ship exports to other countries in the region.

With a population of 83 million, Vietnam has a nascent auto industry structured around more than a dozen joint ventures, with a total annual production capacity of just 175,000 units.

In comparison, South Korea has a population of 45 million, while its auto industry has a combined annual capacity of more than 4 million vehicles.

What this means to you: Even the Chinese are looking for low-cost production bases outside the home market.