Geely production decision could impact Tasco plans

Speaking at the 2025 Chongqing Auto Show that took place during June 6-15, Geely founder and chairman Li Shufu confirmed that the company would cease all construction of new factories worldwide.

“The global auto industry is caught in a serious overcapacity trap,” Li said. “We’ve made the decision to stop building any new manufacturing plants.”

His comments come as Chinese carmakers including Geely, BYD and e-vehicle startup Leapmotor have been slashing prices in a bid to retain market share in an increasingly saturated domestic market.

According to JPMorgan Chase, the average discount rate for Chinese carmakers surged to a record 16.8 per cent in April 2025, double that of a year earlier.

While Geely’s strategic pivot is aimed at safeguarding margins and consolidating resources through the integration of its sub-brands like Volvo, Zeekr and Lynk & Co, the implications of the announcement are already being felt abroad.

In Vietnam, Geely has a partnership agreement with Tasco to develop an assembly plant in the northern province of Thai Binh province, with a planned investment of approximately $168 million.

The factory was expected to produce up to 75,000 vehicles annually in its first phase, with groundbreaking scheduled for this year and initial deliveries in 2026.

The future of the project remains uncertain. As of June 11, Tasco has not issued an official statement addressing how the company will respond to the halt in factory development. Industry watchers and investors alike are closely monitoring developments, particularly as the joint venture had been considered a cornerstone in Tasco’s long-term strategy to expand from auto distribution into local manufacturing and potential export.

Under the leadership of chairman Vu Dinh Do, Tasco has grown into one of Vietnam’s most ambitious automotive groups. In 2024, its subsidiary Tasco Auto sold over 40,500 vehicles, commanding 13.7 per cent of the domestic market share. The company expanded its showroom network to 126 outlets and became the official distributor for several global brands, including Volvo, Lynk & Co, Zeekr and, more recently, Geely.

The Thai Binh project was designed to pivot the group into completely knocked down assembly, with an eye towards export markets that share free trade agreements with Vietnam.

At the company’s AGM held in late May, Do reaffirmed the group’s long-term vision.

“For the next two decades, we believe Chinese manufacturers will lead the global auto industry, thanks to their growing edge in technology, scale, and supply chain capabilities,” he said. “Our decision to partner with Geely wasn’t arbitrary. We chose the most international of Chinese carmakers one with global reach and a diversified portfolio that has already entered several major markets.”

Geely’s restructuring is seen by analysts as a strategic response to a cyclical correction in the global automotive sector, not a retreat from international ambitions altogether. Still, the decision to halt new plant construction could delay, scale down, or even shelve overseas projects, especially in emerging markets like Vietnam.

For Tasco, this places new pressure on its domestic plans at a time when consumer sentiment toward Chinese-made vehicles remains fragile.

Despite growing availability and competitive pricing, Chinese cars still face hesitation among Vietnamese buyers, who are more familiar with brands like Toyota, Hyundai, Honda, Ford, or local brand VinFast. On the stock market, Tasco’s shares have been volatile, reflecting investor concerns about the viability of its bold expansion plans and the sustainability of demand for Chinese automotive brands in Vietnam.

“This is one of the most fiercely competitive markets globally,” said Vu Dinh Do at the AGM. “Vietnam is a battlefield of Japanese, South Korean, and now Chinese automakers. The only way to lead is to understand the global shifts and act ahead of the curve.”