Chinese carmaker BYD Auto Co has a plan to construct a car-part manufacturing plant in Vietnam.
The move is part of the company's efforts to reduce its dependence on China and strengthen its supply chain in Southeast Asia. The investment in northern Vietnam would be greater than $250 million, according to a Reuters report. This will increase the footprint of its parent company in Vietnam where its electronic unit manufactures solar panels.
The company is looking to lease 80 hectares of industrial land to build the plant. The sources told Reuters that negotiations are currently taking place to choose a location for the Vietnam factory. Construction work is expected to begin by the middle of the year.
Once completed, the plant will export components to its planned assembly plant in Thailand. The Vietnam-based operation will also serve the local market through maintenance services and spare parts for BYD vehicles imported from China.
With the investment in Vietnam, BYD hopes to increase capacity, manage costs, and diversify manufacturing away from its operations in China, where demand has been high.
The company's expansion comes at a time when more manufacturers are ramping up their relocation out of China to reduce their reliance amid the trade conflict with the US and manufacturing disruption caused by China's Zero-COVID policy.
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By Thanh Van