Get ready, America; VinFast is on the way.
The Vietnam-based electric vehicle maker is taking the slow boat to California as it sends its first batch of 999 VF 8, the company’s 5-seater electric SUV, to America aboard the Silver Queen, a Panamanian charter vessel.
The Silver Queen is expected to arrive in the Sunshine State about 20 days after being deported from MPC Port in Haiphong, Vietnam.
The company, which held a ceremony to mark the occasion on November 25, said the first VinFast customers in the United States can expect their cars by the end of December.
“The export of the first 999 VF 8s is an important event for VinFast and Vingroup and a proud historic milestone for the Vietnamese automotive industry,” said Nguyen Viet Quang, Vice President and CEO of Vingroup, in a statement. that Vietnam has successfully produced high-quality standard electric vehicles that are ready to compete in the international market.”
News of the shipment follows the company’s Nov. 17 announcement at the Los Angeles Auto Show, where VinFast said it received an order from Autonomy, the world’s largest electric vehicle subscription company. country, for more than 2,500 VF 8 and VF 9 vehicles.
Trying to fill the void
Founded in 2017, VinFast is part of the VinGroup conglomerate, which was founded by Pham Nhat Vuong, Vietnam’s first billionaire.
“The VinGroup has a lot of resources and they are investing those resources to enter the US and European markets,” said Tung Bui, professor of information technology management at the University of Hawaii at Shidler College of Business in Manoa. .
Bui said it was too early to tell how VinFast would fare in the US, “but they followed Hyundai’s marketing strategy when it entered the US market in 1986:”
“There is currently a void for affordable luxury electric vehicles and VinFast is trying to fill that void with a $45,000 entry point,” he said. “They also have an unparalleled aggressive warranty service: 10 years or 200,000, whichever comes first. That’s a strong signal of quality.”
Bui said the company’s timing is good as battery technologies improve and are cheaper.
“In the domestic market, VinFast is rolling out a line of electric motorcycles,” he said. “Vietnam is still recovering from Covid, the economy is well back to full production, and they are profiting from the US-China trade war, with many factories relocating from China or expanding into Vietnam.”
According to a World Bank study, Vietnam’s economic recovery has accelerated over the past six months on the back of resilient manufacturing and a strong rebound in services.
The report says the recovery faces risks such as slowing growth or stagflation in key export markets, further shocks to commodity prices, continued disruption to global supply chains or the emergence of new variants of COVID-19.
“Growing a Global Presence”
VinFast said in July it received a $1.2 billion incentive package from the state of North Carolina for its electric vehicle manufacturing facility at Triangle Innovation Point in Chatham County.
The facility will cover 2,000 acres, with sections for the production and assembly of electric cars and buses, and ancillary industries for suppliers. The plant is designed to reach a capacity of 150,000 vehicles per year.
VinFast also works with investment banks, and CFO David Mansfield said the company plans to go public in the United States sometime in 2023, according to Bloomberg, which would make VinFast one of the first Vietnamese companies to be traded on a US market. .
VinFast will have to work hard to find a place in the crowded EV market.
Ivan Small, an associate professor of anthropology and international studies at Central Connecticut State University, wrote last year that many auto companies “ranging from Peugeot to Isuzu have entered and then exited the U.S. auto market,” and that startups have it even harder.
“VinFast’s investment in the US market demonstrates the company’s commitment to succeed by developing a global presence,” Small said in an article published by the ISEAS-Yusof Ishak Institute, a research institution under the ministry. of Singapore Education.
“By focusing on electric vehicle sales in America, VinFast sees an opportunity to jump into a transitioning market where industry leaders are no longer necessarily established original equipment manufacturers,” he said. he adds.
Attract young buyers
Small said Vinfast sees competition with companies like Tesla (TSLA) – Get a free report as well as many others, such as Amazon (AMZN) – Get a free report supported Rivian (SHORE) – Get a free report,, “who rely on the fact that they can attract new customers based on experimental innovation and competitive prices.”
“New technology often attracts young shoppers eager to try brands that are not yet established,” he added.
Small said that “rather than focusing on gaining access to neighboring China, the world’s largest auto market, Vingroup has turned to the world’s second largest, but ‘original’ auto market – the United States, to establish international brand recognition”.
He cited several likely reasons for this strategy, including the ongoing political tensions between Vietnam and China, “the historical complications for foreign auto companies dependent on Chinese joint venture partners and the Chinese government’s sensitivity to competition from green vehicles, a key sector of industrial development that has received strategic support from Beijing.”
Vietnam’s auto market is now one of the most dynamic in Southeast Asia, according to Minh-Ngoc Nguyen, a researcher for Statista.
“Although still considered a big-ticket item, cars are increasingly taking over Vietnamese city streets, becoming one of the main modes of transportation alongside motorbikes for many city dwellers,” she said. written in January.
“A total of 332,963 automobiles were sold in the Vietnamese market in the first 10 months of this year, up 52 percent year-on-year, according to the Vietnam Automobile Manufacturers Association.
Sales of domestically assembled autos rose 52% to 190,009 units, while those of imported autos jumped 53% year-on-year to 142,954.
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