One more ? Another new car brand? In recent years, and with the arrival of the electric car, a series of more or less consistent and exotic start-ups have been flourishing on the market, and the end of combustion in 2035 should boost initiatives even more, with the electric much less complex to create and assemble than the good old petrolette.
In this rush of new applicants, hungry for a piece of the car market pie, the new kid, at least the last one, is called Vinfast and has a Vietnamese passport. Except that the country does not have even the slightest automobile tradition, that its 110 million inhabitants travel mostly by scooter, and that individual car ownership is still embryonic. So ? Shall we move on to something else? Do we tell ourselves that the newcomer has no chance in Europe and the United States, bastions of the automobile where he wants to make a good place for himself? It is not so simple.
Vinfast belongs to Vingroup, the first and very powerful private company in the country that operates in the real estate, educational, telephone, medical, hotel, etc. sectors. Thanks to its 14,000 million dollars of annual turnover, its 70,000 employees and its valuation of 39,000 million in the Asian stock markets, it has carefully prepared its arrival by car. And to find out, we went to the heart of the conglomerate reactor. Address Haiphong, in the north of Vietnam, where the VF8, VF9 and the future VF7 are manufactured, which will land here.
It is there, on hundreds of hectares, that a giant factory emerged in 2018 with an investment of 3,500 million. It allows manufacturing 250,000 cars per year and the pace can be accelerated to 950,000 models per year. But because Vinfast wants to control its entire production chain, it has added a gigabattery factory where small original Samsung cells are assembled.
A first partnership 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 pay a 200% tax. So, to get around this gigantic additional cost, the German entrusted the local brand with the task of making up and renaming its X5 and Series 5, 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 that linked them to the Munich firm. Now, 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. Likewise, the Vietnamese manufacturer has decided to invest 2,000 million 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 the opening of a third factory in Germany is planned, for an investment similar to that 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. Therefore, for the distribution of its cars, Vinfast does not want to be surrounded by independent dealers. Its garages and workshops are located in all the countries where it is present, it claims to be the owner. In France there are already 8 under construction or about to open and the Vietnamese company wants to open 20, and 50 throughout Europe. At stake: 700 employee hires. In parallel to these directly owned stores, the new brand intends to sell online, with a commercial policy activated on two fronts: virtual and real, Tesla-style.
But how to recharge all these VF7, VF8 and VF9 that will increase? It’s simple: just, again, look at the side of Tesla, for whom the matter was quite successful. This is how 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 total.
We ride at Vinfast, go to school at Vinschool and shop at Vinmall
But Vinfast does not intend to establish its own terminals in Europe or it is rather a collaboration agreement with existing infrastructures, such as Ionity, but the deal is not yet closed. Similarly, the new manufacturer is not going, and rightly so, to allow its customers from the old continent to benefit from its Vitanmian ecosystem.
As we have said, Vingroup is a large conglomerate. Thus, by having a university, 7 hospitals and many schools, but also real estate programs, it allows its clients to access packs. By purchasing a Vinhome villa, they have discounts on their Vinfast car, on Vinschool school fees at Vinuniversity for their children. And when it’s time to vacation, they can stay at the giant Vinpearl resorts, always at a discount.
Obviously Europeans and Americans will not benefit from the Vingroup galaxy by buying a VF8 that should land with us in a few months. At least not yet. Why is the landing of Vinfast cars not a Trojan horse towards the international market? A first step before the arrival of the rest of the group’s activities. The management affirms that it is focused on the automotive objective, not on the other branches. That’s it.
Still, if successful, product diversification abroad is tempting for such an ambitious group. But it is still necessary that this success be at the rendezvous. Tesla, the great American model from Vinfast was born in 2008, when it launched its roadster, and had to wait more than ten years to make money. Does Vinfast have the backbone strong enough to hold out and invest for so long? Answer in 2032, to see if that year VF7, 8 and 9 and their descendants abound in our streets.
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