September 2, 2017 / 8:11 AM / a year ago

UPDATE 1-Vietnam's Vingroup starts construction on $1-1.5 bln first phase car factory

* Project is part expansion into Vietnam's heavy industry

* Will produce 100,000-200,000 vehicles per year in first phase

* Seeks to become top car manufacturer in Southeast Asia (Adds details, comments from vice chairman)

HANOI, Sept 2 (Reuters) - Vietnam's leading property developer Vingroup said on Saturday it launched construction of a car factory in a project worth $1-1.5 billion in the first phase.

The project is part of Vingroup's expansion plan into the heavy industry of Vietnam, its vice chairman was quoted as saying in a statement, following similar moves in other major sectors such as retail and health care.

Vingroup said it hopes to become a top car manufacturer in the Southeast Asian region, making 500,000 cars per year by 2025.

The company expects to produce 100,000-200,000 vehicles per year in the first phase, including 5-seat sedans, 7-seat SUV and electric motorbikes.

Vingroup's spokeswoman told Reuters the factory would introduce the first electric motorbikes in 12 months and first cars in 24 months.

Its construction brand VINFAST signed a memorandum to borrow $800 million from Credit Suisse AG to build the 335-hectare (827.8 acres) factory, located in Vietnam's northern city of Haiphong.

VINFAST plans to buy blueprints of car engines and main mechanical systems from top European and American designers. (Reporting by Mi Nguyen; Editing by Jacqueline Wong)

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