Vietnam’s VinFast targets US market in ‘absurdly hard’ bet
HAI PHONG (Vietnam) (AFP) – Having conquered most industries at home, the optimistic heads of conglomerate Vingroup are aiming much higher as they accelerate their plans to sell Vietnam’s first-ever car in the mighty US market.
The pivot is a bold move by President Pham Nhat Vuong – Vietnam’s richest man – who started out selling dried noodles in the former Soviet Union before amassing his $5 billion fortune in various industries. , including real estate, tourism and education.
His company’s automotive unit, VinFast, already has electric vehicles (EVs) on the streets of Hanoi, though the lure of the lucrative US market is too good to ignore.
However, the company admits that competing in the crowded and tough US market, dominated by Tesla, will be a daunting but worthwhile task.
“If we can get there, we can get there anywhere,” CEO Le Thi Thu Thuy told AFP from the factory site where the finishing touches were made to the VF8, a mid-size SUV in the world. refined design signed by the Italian Pininfarina. who worked with Ferrari for decades.
But, she added, “we want to show people who may not have the right understanding of Vietnam that Vietnam today is quite different from Vietnam during the war, or even Vietnam in the past. ’10 years ago”.
While the goal of getting Americans to drive its cars by Christmas may seem like a huge ask, Vingroup – Vietnam’s largest private company – has a proven track record.
In two years, Pham transformed a muddy swamp near the northern port city of Haiphong into a state-of-the-art factory – with 1,200 robots, German, Japanese and Swedish machinery and a global team of industrial giants. automotive, including BMW and General Motors.
The company has already invested heavily in its American dream.
In July, VinFast opened six showrooms in California, including a flagship store in one of Santa Monica’s hippest malls, though for now it’s only taking orders because vehicles aren’t not yet available.
It plans 30 in total by the end of the year, while it also opened a $2 billion electric vehicle and battery factory in North Carolina that it says will produce 150,000 cars per year. year when fully operational.
The plant aims to create more than 7,000 new jobs, prompting US President Joe Biden himself to tweet the announcement in March.
“I always joke that he’s the best salesman we have,” Thuy says.
But the American public will likely be much more skeptical, said Karl Brauer, a Los Angeles-based analyst at iSeeCars.com, a vehicle comparison site.
“It’s typical that it takes a few decades for brand-new automakers in the U.S. market to become entrenched,” he said, referring to South Korean companies Hyundai and Kia, which have struggled in the 90s and early 2000s.
They are now among the most popular automakers in the United States.
Americans’ perception may be “it’s an unheard of brand that I’ve never had experience with, and I’m not sure I’m confident about the quality,” he added.
Push in Europe
To entice customers, VinFast is offering a very unusual monthly battery lease model for the two US-bound cars – the VF8 and VF9 – lowering the upfront payment cost to $42,000 and $57,500 respectively. Tesla SUVs start at around $65,000.
Once the battery life drops to 70%, VinFast replaces it for free and aims to reuse or recycle the old one.
“The theory behind this is that we’re giving you a vehicle that’s priced similar to an internal combustion engine vehicle,” Thuy explained.
The scale of VinFast’s ambition, which extends to Europe, where they plan to open the first of 20 showrooms by the end of the year, has surprised many professionals.
“It’s extremely difficult to build a car and sell it, at least to a global audience, as seems to be VinFast’s ambitions,” said Matthew Degen, editor of Kelley Blue Book, a research and diary site. buying cars.
“It usually takes years and years to turn a car from a drawing on paper into something that’s in your hands and you actually drive.”
However, VinFast has developed three cars in just 21 months.
And although the mainstream car market is already saturated, he says, there could be a “short window” for them to make their mark in the still-developing electric vehicle sector.
For Brauer, the success of VinFast will largely depend on millennials.
They will have “problems with people over 50…but younger consumers in this country are increasingly open to new vehicles.”
© 2022 AFP