VinFast Cuts India Sales Target, Delays Electric SUV Launch Due To Distribution Network Roadblocks

Vietnamese electric vehicle (EV) manufacturer VinFast has adjusted its India market entry strategy, reducing its inaugural year sales projections by one-third to 3,000 units ahead of its planned festive season debut, says a report by ET Auto. 

The company continues to assess completely knocked down (CKD) assembly processes for its upcoming VF7 and VF6 electric SUV models.

Production Timeline Shifted

The launch schedule for VinFast's electric SUVs has been postponed by about one month due to insufficient sales network development, the report added, citing industry sources, familiar with the development. Manufacturing operations at the company's Thoothukudi facility in southern Indian state of Tamil Nadu, initially planned to commence June 30, have been rescheduled to July 30.

"India is a key market in VinFast's global strategy. VinFast's detailed plans are adjusted based on real-world implementation conditions, and this does not affect our strong commitment to delivering green, smart and convenient mobility solutions to India. Both models are set to go on sale ahead of the festive season," a company spokesperson was quoted as sayig by ET report.

This production delay will consequently push the opening of bookings for the VF7 and VF6 models to mid-July, with customer deliveries now likely by mid-August rather than the original timeline.

Long-Term Strategy

The current year represents primarily a market testing phase, with the company's comprehensive strategy expected to materialise in the following year alongside the introduction of the VF3, positioned as an affordable SUV option.

Dealer Network Faces Attrition

The automaker's distribution strategy is facing substantial challenges since the Bharat Mobility Show in January, where it initially appointed dealers across 40 locations. However, the majority of these dealership partners have subsequently withdrawn their letters of intent, citing concerns over the company's approach to various operational aspects.

Currently, only eight to ten dealers remain committed to the partnership, representing a dramatic reduction from the original network size. The departures have been attributed to inconsistencies in distribution planning, pricing strategies, and product positioning approaches.

Dealer Concerns

"There was a lot of back and forth. They do not seem to have clarity on how many sales touchpoints to have, what price point to launch the models at, and how many units to sell. We couldn't commit investment with this lack of clarity," a dealer principal was quoted as saying.

The uncertainty surrounding fundamental business parameters has made dealership investment decisions challenging, according to former partners who opted to discontinue their association with the brand.

Manufacturing Infrastructure

Despite distribution challenges, VinFast has completed construction of a comprehensive 400-acre integrated EV manufacturing facility in Tamil Nadu, equipped with annual production capacity of 50,000 units. The facility represents significant infrastructure investment in the Indian market.

At the Bharat Mobility Global Expo 2025, the company displayed its complete model range planned for the Indian market, including the VF3, VF7, VF9, and VFe34 SUV variants.

India's Growing EV Market

The Indian electric passenger vehicle segment continues demonstrating steady expansion, with May 2025 data from the Federation of Automobile Dealers Associations showing electric cars capturing 4.1 per cent of total industry sales. This represents growth from 3.5 per cent in April and 2.6 per cent during the corresponding period in the previous year.