Should Western Builders Beware of Vinfast?

One more ? Another new car brand? In recent years and with the advent of the electric car, a number of more or less enduring and exotic start-ups have thrived in the market and the end of combustion in 2035 should encourage further initiatives as the electric car is much less complex to create and assemble than the good old Petrolette.

In this avalanche of new applicants waiting for a piece of cake from the car market, the new boy, at least the newest, is called Vinfast and he has a Vietnamese passport. Except that the country didn’t have the slightest automotive tradition at the beginning, its 110 million inhabitants mainly travel with scooters and individual car ownership is still in its infancy. like that ? Are we moving on to something else? We say to ourselves, the newcomer has no chance in Europe and the USA, strongholds of the car, where he wants to work out a nice place? Not so easy.

Should Western Builders Beware of Vinfast?

Should Western Builders Beware of Vinfast?

Vinfast is part of Vingroup, the country’s first and very powerful private company, active in real estate, education, telephony, medical, hotel and so on. Thanks to its $14 billion in annual sales, its 70,000 employees and its $39 billion valuation on Asian stock exchanges, it has carefully prepared its arrival in the car. And to find out, we went to the heart of the Conglomerate’s reactor. Towards Haiphong, in northern Vietnam, where the VF8, VF9 and future VF7 will be manufactured that will land here.

The Haiphong Vinfast Gigafactory, where the battery cells are assembled.
The Haiphong Vinfast Gigafactory, where the battery cells are assembled.

A huge factory was built there in 2018 on hundreds of hectares for an investment of 3.5 billion. It enables the production of 250,000 cars per year and the rate can accelerate up to 950,000 annual models. But since Vinfast wants to control its entire production chain, it has added a gigafactory of batteries that assembles the small original Samsung cells.

A first collaboration with BMW

But as a car manufacturer, you don’t improvise. To learn, Vinfast has teamed up with BMW in a win-win deal. In Vietnam, imported cars are taxed at 200%. To avoid these gargantuan additional costs, the German hired the local brand to tailor and rebrand his X5 and 5 Series, renamed Vinfast President and Vinfast Lux, respectively. So the Vietnamese learned and integrated the quality of German manufacturing for four years before terminating the contract that linked them with the Munich company this month of August. Now Vinfast is on its own, and they’re big.

Vinfast President: a facelifted BMW X5.
Vinfast President: a facelifted BMW X5.

To achieve this, one factory is good, but three is even better, especially for international development. Also, the Vietnamese manufacturer has decided to invest $2 billion in the United States in a second production unit currently under construction. It is expected to employ 7,000 people in three years. And then Europe? It has not been forgotten and a third factory is set to open in Germany for a similar investment to that in the US.

The plant in Haiphong, which will eventually be able to assemble 950,000 cars, was built in 18 months.
The plant in Haiphong, which will eventually be able to assemble 950,000 cars, was built in 18 months.

This brings the increase to 7.5 billion. But that’s not all, because when you love, you don’t count. Vinfast therefore does not want to surround itself with independent dealers when selling its cars. His garages and workshops are in all the countries where he is present, he intends to be the owner. In France, 8 are already under construction or about to open, and the Vietnamese company wants to open 20 and 50 across Europe. At stake: 700 new employee hires. In parallel with these directly owned stores, the new brand intends to make online sales, with a commercial policy that will be activated on two fronts: the virtual and the real, Tesla style.

But how to reload all those VF7, VF8 and VF9 that will rise? It’s simple: again, it’s enough to look at Tesla’s side, for whom the affair was quite successful. The new brand in Vietnam has already financed and installed its own fast charging stations, and there are now 40,000. Isn’t that a lot? As a guide, there are a total of 65,000 in France.

We drive in Vinfast, we go to school in Vinschool and we shop in Vinmall

But Vinfast doesn’t intend to build its own terminals in Europe, or it’s more of a partnership deal with already existing infrastructures like Ionity, but the deal isn’t finalized yet. Likewise, the new manufacturer will not allow its customers on the old continent to benefit from its vitamine ecosystem, and with good reason.

As we said before, Vingroup is a huge conglomerate. With a university, 7 hospitals and many schools, but also real estate programs, it allows its customers to access packages. By buying a Vinhome villa, they get discounts on their Vinfast car and on Vinschool school fees at Vinuniversity for their children. And when holiday time comes, they can stay at the huge Vinpearl resorts, always at a discount.

In Vietnam we buy a Vinfast car and send our kids to Vinschool.
In Vietnam we buy a Vinfast car and send our kids to Vinschool.
You can also shop at Vincom Mega Mall.
You can also shop at Vincom Mega Mall.

Obviously, Europeans and Americans aren’t going to take advantage of the Vingroup Galaxy by buying a VF8 that should land with us in a couple of months. At least not at the moment. After all, isn’t the landing of Vinfast cars a Trojan horse in the international market? A first step before the arrival of the other activities of the group. The management states that it is concentrating on the automotive goal, not on the other sectors. That is.

Still, if successful, product diversification abroad is tempting for such an ambitious group. But still it is necessary that this success is at the rendezvous. Tesla, Vinfast’s big American model, started out in 2008 when it launched its roadster and had to wait more than ten years to make money. Does Vinfast have a backbone strong enough to hold out and invest for this long? Answer in 2032 to see if VF7, 8 and 9 and their descendants abound in our streets this year.

Kaddouri Ismail

I am Ismail from Morocco, I work as a blogger and online marketer. I am also the founder of the “Mofid” site, in which I constantly publish many important articles in the field of technology, taking advantage of more than 5 years of experience working in the field. I focus on publishing in a group of areas, the most important of which are programming, e-marketing, digital currencies and freelance work.

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