With its electric models, the Vietnamese Vinfast attacks America

published on Sunday 09 October 2022 at 05:47

Seeing its electric cars rolling on American roads at the end of the year is the somewhat crazy bet of the Vinfast brand, owned by the largest private group in Vietnam.

The brand’s models are increasingly present on the streets of Hanoi or Ho Chi Minh City, but attacking the US market, Tesla’s homeland, is a risky bet in an already crowded market.

In less than two years, the Vingroup conglomerate, run by Vietnam’s richest man, has transformed a muddy swampland near the northern port city of Haiphong into a state-of-the-art factory, equipped with 1,200 robots, machines bought from Germany. , Japan and Sweden, and an international team made up of automotive giants such as BMW and General Motors.

Its chairman, Pham Nhat Vuong, who made his fortune in the former USSR selling instant noodles, has since amassed a $5 billion fortune that allows him to be ubiquitous in Vietnam, from real estate to health, from tourism to The education.

The American market represents an important turning point for Vinfast, admits its president Le Thi Thu Thuy.

“If we are successful there, we can be successful anywhere,” he told AFP from the factory site.

The latest model, the VF8, an SUV designed by Italian Pininfarina, who has worked with Ferrari for decades, is about to be launched.

– The American dream –

“We want to show (…) that the Vietnam of today is quite different from the Vietnam of the war, or even the Vietnam of ten years ago,” he adds.

The company has invested heavily in its American dream.

In July, Vinfast opened six California showrooms, including a flagship store in Santa Monica, on one of Los Angeles’ most exclusive streets.

The manufacturer plans to open 30 in all by the end of the year.

It will also spend $2 billion to open a car and battery factory in North Carolina.

Eventually, 150,000 cars will roll off the assembly line and more than 7,000 new jobs are expected to be created, prompting US President Joe Biden himself to make the announcement on Twitter in March.

“He’s our best salesman,” jokes Ms. Thuy.

But the American public will surely be much more skeptical, estimates Karl Brauer, an expert at the American site iSeeCars.com.

“It usually takes about 20 years for a new manufacturer to establish itself in the US market,” he says, citing South Korea’s Hyundai and Kia.

For Americans, an unknown brand is “a brand that they have never had experience with on the road, and whose quality they doubt,” he adds.

To attract customers, Vinfast relies on price. Its two VF8 and VF9 models offered in the US market cost $42,000 and $57,500, respectively, compared to $65,000 for Tesla’s entry-level SUV.

The secret is a monthly battery rental system, which the brand replenishes for free if its capacity drops below 70%.

“The underlying theory is that we offer you a vehicle that is similar in price to a combustion engine vehicle,” says Thuy.

But in addition, “you have become aware of the environment… you are a good consumer, so there is no reason not to buy Electric Vehicles,” adds Thuy, who claims to have received more than 10,000 advance orders.

– Next target, Europe –

The scale of VinFast’s ambitions, which extend to Europe, where they plan to open a first showroom by the end of the year, has surprised many in the industry.

“It’s extremely difficult to build a car and sell it, at least to a global audience, as VinFast’s ambition seems to be,” said Matthew Degen, editor of Kelley Blue Book, a research site and journal about car buying.

Vinfast developed three vehicles in just 21 months, whereas “it usually takes years and years to take a car from a concept on paper to something you actually drive.”

And while the market for regular cars is already saturated, he says, there may be a “narrow window of opportunity” in the still-developing electric vehicle sector.

The Vietnamese “will struggle with people over 50… but younger consumers in this country are becoming more open to new vehicles,” Brauer said.

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