VinFast, a member of VinGroup, and Thailand’s AAPICO Hitech Public Company signed a memorandum of understanding on Monday to enter into the joint venture.

This is the first joint venture for VinFast’s supporting industry complex, which aims to produce the body for the first two models of VinFast’s sedan and SUV lines with a total investment of US$60 million, of which 51 per cent will be owned by AAPICO and 49 per cent by VinFast.

AAPICO will be responsible for project management, which includes manufacturing technologies, factory design, and equipment installment. Meanwhile, VinFast will provide the location for the factory and create the best possible conditions for the joint venture to operate efficiently.

The factory will be built on 9.1ha lot in VinFast’s supporting industry park in northern Hai Phong City.

Aside from the joint venture, VinFast has also invested US$85 million to buy fittings and molds from AAPICO and will spend $20 million to build the factory.

With the establishment of the joint venture and an investment for the equipment, VinFast will conduct almost all of the stamping and welding of body locally, laying the foundation for increased localisation rates.

“With this cooperation model, we believe that there will be many domestic and foreign enterprises involved in the supporting industry in Viet Nam,” Nguyen Viet Quang, Vice President and CEO of VinGroup, said. “This will be an important step in creating a complete and synchronous ecosystem for the Vietnamese automobile manufacturing industry."

Meanwhile, the President and CEO of AAPICO Hitech Yeap Swee Chuan said his company was honoured to have the opportunity to cooperate with Vingroup and VinFast. He said the joint venture would create a milestone in the history of the automobile industry in Viet Nam, with the first two models of the Vietnamese brand set to be launched in 2019.

AAPICO is one of the leading manufacturers of automotive parts in Thailand. It has networks in India, Europe, the United States, Mexico, and China. Its major customers are Isuzu, Nissan, Ford, and Honda, as well as Mitsubishi.