ODI-led manufacturing setup in Vietnam for a Chinese auto parts maker

Client Background

The client is an automotive parts manufacturer based in Ningbo, primarily supplying chassis system components to well-known domestic and international OEMs. Affected by US-China trade friction and the client's "China Plus One" supply chain strategy, the client decided to establish an overseas production base in Haiphong, Vietnam, to continue serving its European and American customers.

Project Timeline

From project initiation to official factory production, the entire cycle was controlled within 8 months, which is considered a relatively fast pace for manufacturing overseas projects.

• Months 1-2: Completed ODI filings with NDRC and MOFCOM, established Hong Kong holding company and Vietnam project company

• Months 3-4: Completed industrial land selection, lease contract signing, and environmental assessment report

• Months 5-6: Factory construction and equipment installation, while simultaneously launching local employee recruitment and training

• Months 7-8: Completed trial production, customer audits, and official mass production

Key Challenges and Solutions

Land leasing was the biggest challenge in the early stages of the project. Industrial land supply in Vietnam is relatively tight, especially in key northern industrial zones. Through our local partners, we secured a ready-built factory in the DEEP C Industrial Zone in Haiphong in advance, avoiding delays from self-built factory construction.

In terms of labor, there is a gap in skill levels between Vietnamese technical workers and Chinese workers. We recommended that the client adopt a hybrid team model of "Chinese technical backbone + Vietnamese local workers," and arranged two months of technical training before production launch.

In terms of tax planning, we fully utilized Vietnam's corporate income tax preferential policy of "four-year exemption, nine-year half-rate," while achieving efficient profit repatriation through the Hong Kong holding company.

Project Results

In the first year after production launch, the factory reached 75% of designed capacity, and achieved full capacity in the second year. The client successfully retained existing European and American orders and obtained first overseas supplier qualification certification from multiple new customers.