AFP, Posted on Sunday, October 9, 2022 at 5:47 am
The Vinfast brand, owned by Vietnam’s largest private group, could see its electric vehicles on American roads by the end of the year.
The brand’s models are increasingly present on the streets of Hanoi and Ho Chi Minh City, but attacking the American market, home of Tesla, is a risky bet in an already crowded market.
In less than two years, conglomerate Vingroup, run by Vietnam’s richest man, has transformed a muddy patch of swamp near the northern port city of Haiphong into a modern factory equipped with 1,200 robots, machines bought from Germany. , Japan and Sweden, as well as an international team from such automotive giants as BMW and General Motors.
Its president, Pham Nhat Vuong, who made his fortune selling instant noodles in the former Soviet Union, has since amassed a fortune of $5 billion, allowing him to be omnipresent in Vietnam, from real estate to health care, from tourism to education.
The American market represents an important turning point for Vinfast, admits its president Le Thi Thu Thuy.
“If we succeed there, we can succeed anywhere,” she told AFP from the factory.
The latest VF8 model is about to be released, an SUV designed by the Italian company Pininfarina, which has collaborated with Ferrari for decades.
– the american dream –
“We want to show (…) that today’s Vietnam is very different from the Vietnam of the war or even from the Vietnam of ten years ago,” she adds.
The company has invested heavily in its American dream.
In July, Vinfast opened six showrooms in California, including a flagship store in Santa Monica, one of Los Angeles’ most exclusive streets.
In total, the manufacturer plans to open 30 by the end of the year.
He will also spend $2 billion to open a plant to make cars and batteries in North Carolina.
Eventually, 150,000 vehicles will roll off the assembly line and more than 7,000 new jobs are expected to be created, prompting US President Joe Biden to make the announcement on Twitter in March.
“He’s our best salesman,” jokes Ms Tui.
But the American public will probably be much more skeptical, suggests Carl Brauer, an expert at the American site iSeeCars.com.
“It usually takes about 20 years for a new manufacturer to gain a foothold in the US market,” he says, citing South Korea’s Hyundai and Kia.
For Americans, an unknown brand is “a brand that they’ve never had experience with on the road and that they have doubts about,” he adds.
To attract customers, Vinfast bets on price. Its two models, the VF8 and VF9, offered in the US market, cost $42,000 and $57,500, respectively, versus $65,000 for Tesla’s entry-level SUV.
The secret is the monthly battery rental system, which the brand replaces for free when its capacity drops below 70%.
“The basic theory is that we offer you a vehicle at a price similar to an internal combustion engine car,” Tui says.
But beyond that, “you’ve become environmentally conscious … you’re a good consumer, so there’s no reason not to buy electric cars,” adds Thuy, who claims to have received more than 10,000 pre-orders.
– Next target, Europe –
The scale of VinFast’s ambitions to expand into Europe, where it plans to open its first showroom by the end of the year, has stunned many in the industry.
“It’s extremely difficult to build a car and sell it, at least to a global audience, as VinFast’s ambitions seem to be,” noted Matthew Degen, editor of Kelley Blue Book, a research and diary site.
Vinfast developed three cars in just 21 months, while “it would normally take years and years to take a car from a concept on paper to something you actually drive.”
And while the conventional car market is already saturated, he says, there may be a “thin window of opportunity” in the still-developing electric vehicle sector.
The Vietnamese “will struggle with the over-50s … but younger consumers in this country are increasingly open to new cars,” Brower said.