VinFast has suspended plans to manufacture three electric vehicles in India and instructed suppliers to halt work on the projects while it reassesses costs, according to two sources and a company memo reviewed by media sources, a year after the Vietnamese automaker entered the Indian market.

The manufacturer has asked suppliers to "hold all activities" on three programmes, including the two-door VF3 SUV and the VF6 and VF7 SUVs, which it currently imports as kits from Vietnam and assembles in India. The VF3 was expected to be VinFast's lowest-priced model in the Indian market.

India expansion

The suspension comes as VinFast continues its expansion in India following challenges in gaining market share in the United States and Europe. The suspension of plans to locally manufacture the three vehicles in India has not been previously reported.

VinFast opened its first factory outside Vietnam in southern India last year and pledged to invest US$ 2 billion as it sought to establish a regional manufacturing base serving South Asia, the Middle East and Africa.

VinFast did not directly address whether it had suspended local manufacturing plans for the three models. It said it had not changed or suspended plans for the VF6 and VF7 models currently on sale in India and would continue to assemble them at its factory.

While VinFast has publicly stated that it intends to increase local sourcing from India, including through partnerships with domestic suppliers, plans to manufacture the VF3, VF6 and VF7 in the country had not previously been disclosed and were described to media sources by people familiar with the matter.

"India is an important market in VinFast's long-term business and manufacturing strategy," a company representative told media sources in a statement, adding that, based on market research and consumer feedback, it was making "appropriate adjustments" to its products to "better meet the needs of Indian customers".

VinFast has faced challenges in gaining market share in the world's third-largest car market, as have other manufacturers including Volkswagen and Nissan. Volkswagen and Nissan have not reached the sales scale achieved by manufacturers such as Suzuki and Hyundai.

In a July memo to suppliers, the automaker said it had decided to "temporarily" put all development work related to the VF3, VF6 and VF7 on hold. Developing and sourcing parts locally would have enabled VinFast to avoid higher import costs and reduce vehicle prices.

Supplier investments

The memo also asked suppliers to provide a detailed breakdown of the "total amount invested to date" in the projects requiring payment or reimbursement from VinFast across cost categories including tooling, engineering and materials, along with "supporting documentation where available".

VinFast did not meet its planned costs for developing parts in India for the three vehicles, which led it to halt the work, one of the sources said. Both sources declined to be named because they were not authorised to speak to the media.

Backed by Vietnam's largest conglomerate, Vingroup, VinFast launched in India in September 2025 with its VF6 and VF7 electric SUVs. Its Indian factory has an initial annual production capacity of 50,000 cars, which can be scaled up to 150,000 units.