One more? Another new car brand? In recent years, and the advent of the electric car, several more or less consistent and exotic startups have developed in the market, and the end of combustion in 2035 should be to encourage initiatives, electricity is much more complex to produce and accumulate than good old petroleum.
In this avalanche of new applicants, eager for a piece of cake from the car market, the new kid, at least the newest one, is called Vinfast and he has a Vietnamese passport. Except that the country does not have the beginning of a small car tradition, that its 110 million inhabitants mainly travel by scooter, and that individual car ownership is still embryonic. So? Let’s move on to another one ? We say to ourselves that the newcomer has no chance in Europe and the US, bastions of the car where he seeks to carve a nice place for himself? It’s not that easy.
Vinfast belongs to Vingroup, the first and very powerful private company in the country that operates in real estate, education, telephony, medical, hotel and others. Thanks to its 14 billion dollars in annual turnover, its 70,000 employees and its valuation of 39 billion on the Asian stock exchange, it has carefully prepared its arrival in the car. And to find out, we went to the heart of the conglomerate’s reactor. Direction to Haiphong, in the north of Vietnam, where the VF8, VF9 and future VF7 are manufactured, to land here.
There, over hundreds of hectares, a giant factory emerged in 2018 for an investment of 3.5 billion. This makes it possible to produce 250,000 cars per year and the rate can accelerate to 950,000 model years. But as Vinfast wants to control the entire production chain, it has added a gigafactory of batteries where small original Samsung cells are assembled.
A first association with BMW
But you don’t improvise as a car manufacturer. Also, to find out, Vinfast has joined forces with BMW, with a win-win deal. In Vietnam, imported cars are taxed at 200%. So, to avoid this huge additional cost, the German entrusted the local brand with the task of creating and rebadging the X5 and its 5 Series, which were renamed Vinfast President and Vinfast Lux. Therefore, for four years, the Vietnamese have learned, and integrated the quality of German manufacturing, before rejecting, this month of August, the contract that binds them to the Munich company. Today, Vinfast stands on its own two feet, and they have scale.
To achieve this, one factory is good, but three is even better, especially for international development. Also, the Vietnamese manufacturer decided to invest 2 billion dollars in the United States, in the second production unit that is currently under construction. It should employ 7,000 people within three years. And Europe then? It was not forgotten and a third factory had to be opened in Germany, for an investment similar to that made in the US.
This brings an increase of 7.5 billion. But it’s not there, because if 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, he wants to be the owner. In France, 8 are under construction or about to open and the Vietnamese company wants to open 20, and 50 throughout Europe. At risk: 700 employee recruitments. Together with these directly owned stores, the new brand intends to make online sales, with a commercial policy activated in two fields: the virtual and the real, Tesla that style.
But how to reload all these VF7, VF8 and VF9 to grow? It’s simple: it’s enough, again, to look at the side of Tesla, whose activity is very successful. As it is in Vietnam, the new brand has already financed and installed its own fast charging stations, there are already 40,000. Isn’t that a lot? As an indication, there are 65,000 in France, in all.
We went to Vinfast, we went to school at Vinschool and we shopped at Vinmall
But Vinfast does not intend to build its own terminals in Europe or it is a question of a partnership agreement with existing infrastructures, such as Ionity, but the business is not done yet. In the same way, the new manufacturer will not go, and for good reason, to allow its customers in the old continent to benefit from its vitanmian ecosystem.
As we said, Vingroup is a big conglomerate. Thus, there is a university, 7 hospitals and many schools, but also real estate programs, it allows customers to access packages. By purchasing a Vinhome villa, they have discounts on their Vinfast car, Vinschool school fees at Vinuniversity for their children. And when vacation time comes, they can stay at the giant Vinpearl resorts, often at a discount.
Apparently, Europeans and Americans will not benefit from the Vingroup galaxy by buying a VF8 that should arrive with us in a few months. At least not for now. Because isn’t the landing of Vinfast cars a Trojan horse towards the international market? A first step before the arrival of other group activities. The management admits that it is focused on the automotive goal, not on other branches. That is.
However, if successful, product diversification overseas is tempting for an ambitious team. But still it is necessary that this success is in the meeting. 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 a strong backbone to hold and invest for such a long time? Answer in 2032, to see if in that year, the VF7, 8 and 9 and their descendants will be abundant on our streets.