AFP, published on Sunday 09 October 2022 at 05:47
By the end of the year, electric cars have been spotted on American roads, that’s the somewhat crazy bet of the Vinfast brand, owned by Vietnam’s largest privately owned group.
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 gamble in an already crowded market.
In less than two years, the Vingroup conglomerate, led by Vietnam’s richest man, has transformed a muddy swamp near the northern port city of Haiphong into a state-of-the-art factory, equipped with 1,200 robots, machines purchased from Germany, Japan and Sweden, and an international team. consisting of car giants such as BMW and General Motors.
President Pham Nhat Vuong, who made a fortune in the former USSR selling instant noodles, has since amassed a $5 billion fortune, making him ubiquitous in Vietnam, from real estate to health, from tourism to education.
The American market is an important turning point for Vinfast, admits chairman Le Thi Thu Thuy.
“If we succeed there, we can succeed everywhere,” she told AFP from the factory site.
The latest model, the VF8, an SUV designed by the Italian Pininfarina, who has worked with Ferrari for decades, is about to appear.
– The American Dream –
“We want to show (…) that today’s Vietnam is very different from the Vietnam of the war, or even 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, on one of Los Angeles’ most upscale arteries.
The manufacturer plans to open a total of 30 by the end of the year.
He will also spend $2 billion to open an auto and battery factory in North Carolina.
Ultimately, 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 to make the announcement himself on Twitter in March.
“He’s our best salesman,” jokes Mrs Thuy.
But the American public will undoubtedly be much more skeptical, estimates Karl Brauer, expert at the American site iSeeCars.com.
“It usually takes about twenty years for a new manufacturer to establish itself on the American market,” he quotes South Koreans Hyundai and Kia.
For Americans, an unfamiliar 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 on offer 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 replaces for free if the capacity is reduced to less than 70%.
“The underlying theory is that we are offering you a vehicle that is comparable to a combustion engine vehicle,” Thuy says.
But on top of that, “you’ve become environmentally conscious… you’re a good consumer, so there’s no reason not to buy electric vehicles,” adds Thuy, who claims to have received more than 10,000 pre-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 stunned many in the industry.
“It’s extremely difficult to build and sell a car, at least to a global audience, as VinFast’s ambitions seem to be,” noted Matthew Degen, editor of Kelley Blue Book, a research and journaling site.
Vinfast developed three vehicles in just 21 months, when “it usually takes years and years to take a car from a concept on paper to something you actually drive.”
And while the mainstream auto market is already saturated, he says, there may be a “thin opportunity” in the still-evolving electric vehicle sector.
Vietnamese “will struggle with the over-50s…but younger consumers in this country are increasingly open to new vehicles,” Brauer said.