Nehak Nguyen’s photo. Video by Quy Le Bui and Sebastien Vuagnat in Santa Monica.
Having occupied most industries at home, the optimistic bosses of the Vingroup conglomerate are setting their sights much higher as they ramp up their plans to sell the first-ever Vietnamese car in the powerful US market.
The hub is a bold move by chairman Pham Nhat Phuong – Vietnam’s richest man – who started selling dried noodles in the former Soviet Union before amassing his $5 billion fortune in a range of sectors including real estate, tourism and education.
His VinFast auto unit already has electric vehicles (EVs) on the streets of Hanoi, although the allure of the lucrative US market cannot be ignored.
However, the company admits that competing in the crowded and tough US market, which is dominated by Tesla, will be a huge but worthwhile undertaking.
“If we can get there, we can get anywhere,” CEO Lou Thi Thuy told AFP from the factory site where the VF8 is being finalized, an elegantly designed mid-size SUV designed by Italian company Pininfarina. that has worked with Ferrari for decades.
But, she added, “We want to show people who may not have a proper understanding of Vietnam that today’s Vietnam is very different from the Vietnam during the war, or even the Vietnam of 10 years ago.”
While the goal of getting Americans to drive by Christmas may seem like a huge demand, Vingroup – Vietnam’s largest private company – has a proven track record of delivery.
Within two years, Pham turned a muddy patch of swamp near the northern coastal city of Haiphong into a state-of-the-art factory — complete with 1,200 German, Japanese and Swedish robots and machines, and a global team of auto giants including BMW and General Motors.
The company has already invested heavily in its American dream.
In July, VinFast opened six showrooms in California, including a flagship store in one of the trendiest malls in upscale Santa Monica, though it’s only taking orders at the moment because the vehicles aren’t yet available.
It plans 30 in total by the end of the year, while also starting a $2 billion electric car and battery plant in North Carolina, which it says will produce 150,000 vehicles a year when fully operational.
The plant aims to create more than 7,000 new jobs, prompting US President Joe Biden himself to tweet the announcement back in March.
“I always joke that he’s our best salesperson,” says Thuy.
The American public will likely be more skeptical, said Carl Brauer, a Los Angeles-based analyst at iSeeCars.com, a car comparison site.
“It used to take two decades for automakers to be completely new to the American market,” he said, referring to Hyundai and Kia in South Korea, which struggled through the 1990s and early 2000s.
They are now among the most popular automakers in the United States.
He added that Americans’ perception may be “this is a brand that I’ve never heard of and had no experience with, and I’m not sure I trust the quality.”
To attract customers, VinFast is pushing an unusual monthly battery rental model for the two US-bound vehicles – the VF8 and VF9 – which reduces the down payment cost to $42,000 and $57,500, respectively. Tesla SUVs start around $65,000.
Once battery life drops to 70 percent, VinFast replaces it for free, aiming to either reuse or recycle your old battery.
“The theory behind this is that we’re giving you a car that’s priced similarly to an internal combustion engine vehicle,” Thuy explained.
The scale of VinFast’s ambition, extending to Europe, where they plan to open their first 20 showrooms by the end of the year, has stunned many in the business.
“It’s incredibly difficult to build a car and sell it, at least to a global audience, as VinFast’s ambitions seem,” said Matthew Deggin, senior editor at Kelley Blue Book, an automotive shopping and research site.
“It usually takes years and years to transform a car from a design on paper to something in your hands while you’re actually driving it.”
However, VinFast developed three cars in just 21 months.
And while the regular car market is already saturated, he says, there may be a “short window” for them to make their mark in the still-developing electric car segment.
For Brauer, the success of VinFast will be largely due to millennials.
They will have “problems with people over 50…but younger consumers in this country are becoming more open to new cars.”