One more ? Another new car brand? In recent years, and the advent of the electric car, a number of more or less consistent and exotic start-ups have been flourishing on the market, and the end of combustion in 2035 should further encourage initiatives, the electric being much less complex to create and assemble than the good old petrolette.
In this avalanche of new applicants, eager for a piece of cake from the car market, the new kid, at least the latest, is called Vinfast and he has a Vietnamese passport. Except that the country does not have the beginning of the slightest automobile tradition, that its 110 million inhabitants travel mainly by scooter, and that individual car ownership is still embryonic. So ? Let’s move on to something else ? We say to ourselves that the newcomer has no chance in Europe and the US, strongholds of the car where he intends to carve out a nice place for himself? Not that easy.
Should Western builders be wary of Vinfast?
Vinfast belongs to Vingroup, the first and very powerful private company in the country which operates in real estate, education, telephony, education, medical, hotel and so on. Thanks to its 14 billion dollars in annual turnover, its 70,000 employees and its valuation of 39 billion on the 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. Direction Haiphong, in the north of Vietnam, where the VF8, VF9 and future VF7 are manufactured, which will land here.
It is there, over hundreds of hectares, that a giant factory arose in 2018 for an investment of 3.5 billion. It makes it possible to manufacture 250,000 cars per year and the rate can accelerate up to 950,000 annual models. But as Vinfast wants to control its entire production chain, it has added a gigafactory of batteries where the small original Samsung cells are assembled.
A first association with BMW
But you don’t improvise as a car manufacturer. Also, to learn, Vinfast joined forces with BMW, with a win-win deal. In Vietnam, imported cars are taxed at 200%. So, to circumvent this gigantic additional cost, the German entrusted the local brand with the task of making up and rebadging its X5 and its 5 Series, renamed Vinfast President and Vinfast Lux respectively. Thus, for four years, the Vietnamese learned, and integrated the quality of German manufacturing, before denouncing, in this month of August, the contract which bound them with the firm of Munich. Now, Vinfast stands on its own feet, and they have scale.
Vinfast President – A BMW X5 I refaced.
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 dollars in the United States, in a second production unit currently under construction. It should employ 7,000 people in three years. And Europe then? It has not been forgotten and a third factory is due to open in Germany, for an investment similar to that which was made in the US.
This brings the addition to 7.5 billion. But it doesn’t stop there, because when you love, you don’t count. So, for the distribution of its cars, Vinfast does not want to surround itself with independent dealers. His garages and workshops are located in all the countries where he is present, he intends to be the owner. In France, 8 are already under construction or about to be opened and the Vietnamese company wishes to open 20, and 50 throughout Europe. At stake: 700 employee recruitments. In parallel with these directly owned stores, the new brand intends to make online sales, with a commercial policy activated on two fronts: the virtual and the real, Tesla style.
But how to reload all these VF7, VF8 and VF9 which will surge? It’s simple: it suffices, again, to look at the side of Tesla, to whom the affair was rather successful. This is how in Vietnam, the new brand has already financed and installed its own fast charging stations, there are now 40,000 of them. Is that not much? As an indication, there are 65,000 in France, in all.
We ride in Vinfast, we go to school at Vinschool and we shop at Vinmall
But Vinfast does not intend to establish its own terminals in Europe or it is rather a question of a partnership agreement with already existing infrastructures, like Ionity, but the business is not yet concluded. In the same way, the new manufacturer is not going, and for good reason, to allow its customers on the old continent to benefit from its vitanmian ecosystem.
As we have said, Vingroup is a huge conglomerate. Thus, having a university, 7 hospitals and many schools, but also real estate programs, it allows its customers to access packs. By buying a Vinhome villa, they have discounts on their Vinfast car, on Vinschool school fees at Vinuniversity for their children. And when vacation time comes, they can stay in the giant Vinpearl resorts, always with a discount.
Obviously, Europeans and Americans will not benefit from the Vingroup galaxy by buying a VF8 which should land with us in a few months. At least not for the moment. Because isn’t the landing of Vinfast cars a Trojan horse towards the international market? A first step before the arrival of the group’s other activities. The management claims that it is focused on the automotive objective, not on the other branches. 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, the great American model of Vinfast started in 2008, when he launched his roadster, and had to wait more than ten years to make money. Does Vinfast have the backbone strong enough to hold on and invest for that long? Response in 2032, to see if that year, VF7, 8 and 9 and their descendants abound in our streets.