According a decision issued by the Hanoi Department of Finance, Vinaxuki’s project to build the automobile assembly and manufacturing plant for buses, coaches, and passenger cars, approved in 2008, has ceased operations due to legal violations and prolonged inactivity.

The original investment approval for the plant was granted on January 29, 2008, with an investment certificate issued on September 17, 2008. However, under Article 48, Clause 2b of the Investment Law, the project was terminated as the investor failed to maintain or formally adjust the investment location within six months of being no longer permitted to use the site.

As part of the transition, the Hanoi People’s Committee on July 15, 2025 issued a dispatch authorizing Huong Giang Investment and Development Co., Ltd. to acquire land use rights and related assets to develop the Nam Hong Commercial and Service Complex.

Vinaxuki agreed with the project termination, as documented in a meeting on June 10, 2025, between the company and Hanoi’s Department of Finance. The company is now required to complete project liquidation procedures and fulfill all outstanding investor obligations under Vietnamese law.

Vinaxuki’s rise and fall: From national hope to industry exit

Launched in 2004, the Vinaxuki auto plant in Hanoi's former Me Linh district (now Phuc Thinh commune) was once hailed as a pioneering project in Vietnam's automotive sector.

Designed with a 30,000-vehicle annual capacity, the factory aimed to employ over 9,000 workers, with ambitions to achieve 50% localization for passenger cars and over 40% for trucks.

Between 2006 and 2008, Vinaxuki produced over 20 truck models with a localization rate of 27%. The company posted steady profits, earning VND90-160 billion ($6.07 million) annually, and fully repaid bank loans within three years.

Encouraged by government incentives and ASEAN’s zero import tariff policy starting in 2018, Vinaxuki invested over VND900 billion ($34.12 million) from retained earnings and bank loans into advanced manufacturing, including metal casting, mold production, robotic painting lines, and laser/plasma cutting.

The company also entered technology partnerships with Japanese firms, building a design center and producing truck cabins, chassis, and car bodies. It expanded with new plants in Thai Nguyen and Thanh Hoa provinces, and explored selling stakes to potential investors to fund operations.

However, the dream collapsed in 2012. The primary cause was over-reliance on short-term bank loans. During the 2011-2012 financial crisis, Vietnam’s auto market slumped. Thousands of assembled vehicles went unsold, forcing Vinaxuki to slash prices and halt production. That year, the company posted a VND45 billion ($1.7 million) loss, leading banks to cut off credit lines, even for working capital.

In 2015, Vinaxuki began selling assets from its Me Linh factory including machinery, spare parts, and even scrap to pay debts and retain a skeleton staff. Despite some liquidation efforts in 2017-2018, including equipment auctions by creditors, the company still owed over VND1.32 trillion ($50 million).

At its lowest point, potential buyers visited the facility offering to purchase machinery as scrap metal.