Waiting On World Domination: Vietnam's VinFast Launches First Model
Real-estate conglomerate Vingroup JSC’s auto unit, VinFast, rolled out its first model today, which also means Vietnam officially has a automaker. Starting with the Fadil hatchback, VinFast eventually plans to produce a sedan, sport utility vehicle, and some electric motorbikes.
VinFast’s primary goals include flexing Vietnam’s burgeoning industrial abilities while supporting the country with affordable vehicles citizens might be interested in. Easier said than done when the nation’s average annual income is around $2,600. Yet Vietnam is growing by leaps and bounds, supplying more individuals with the means to purchase their own car.
Still, the Fadil needs to remain affordable; the company is pricing it starting at 394.5 million dong (about $16,900 USD). However, pricing won’t be the only issue VinFast will have to confront as a new player in the industry.
“Product quality is a concern,” Truc Pham, a senior analyst at ACB Securities JSC in Ho Chi Minh City, told Bloomberg. “Vietnamese people favor foreign brands for high-value products. It will take years for customers to accept a new local brand.”
With an assembly line now humming, VinFast said it will begin delivering cars to customers on Monday and plans on giving global brands selling within the country’s borders what-for. Based on the Opel Karl Rocks, the Fadil won’t be the company’s only model for long. VinFast showcased the Lux A2.0, and Lux SA2.0, at the the 2018 Paris Auto Show to preview its upcoming sedan and SUV.
While both are still said to be affordable enough to sell in Vietnam, there should be a price disparity between future models and the inexpensive Fadil. VinFast’s next models will use BMW architecture and incorporate designed penned by Pininfarina. Roughly the same size as the BMW X5 (F15) and 5-Series (F10), both cars are said to utilize a 2.0-liter engine producing 228 hp.
Sales will be isolated to Vietnam and nearby Asian markets for the time being, though the manufacturer has already said it hopes to export vehicles to Europe and North America eventually.
From Bloomberg:
VinFast plans to make 250,000 vehicles during a first stage of operations, with projected production increasing to 500,000 vehicles a year by 2025. Last year, the company said it expects to begin exports in mid-2020.
The company said it received 10,000 vehicle pre-orders a year ago. Vietnamese purchased 119,497 new vehicles in the first five months of the year, an 18 percent jump from the year-earlier period, according to the Vietnam Automobile Manufacturers’ Association.
“This makes a great contribution to the national economy,” Vietnamese Prime Minister Nguyen Xuan Phuc said in a speech during a ceremony at VinFast’s factory complex in Haiphong. “It affirms the Communist Party’s policy that the private sector is a very important driver of the economy. I want VinFast to go to the regional and global markets.”
[Images: TommyTeo/Shutterstock]
A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.
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Vingroup is owned by a real go-getter kind of guy worth $7 billion or so. Sounds as juiced as the Koreans were in the '80s, but instead of buying old Mitsubishi clobber from Plymouth Arrows like Proton of malaysia also did to produce mediocrity, at least he started with much better bones for his cars. To make them, he hired all sorts of Westerners to design, set up, build and develop the vehicles and the plant itself, supposed to be costing a couple of billion. Last generation BMWs underneath, Pininfarina styling. https://www.topspeed.com/cars/car-news/vinfastfollow-the-birth-of-a-car-company-using-bmw-tech-and-italian-design-from-pininfarina-ar182463.html However, for all those who struggled with BMW's N20 turbo 2.0t engine from 2011 through the end of 2015 with its chain guide issues, and wondered why the B Series engine, both four and six replaced it so soon, well guess who bought the old production machinery!?
Here's some interesting news: "General Motors recently announced a partnership between Chevrolet and VinFast. VinFast will have exclusive rights to distribute Chevys in Vietnam and will take ownership of the existing General Motors(GM Korea) factory in Hanoi (VIDAMCO). That factory will then build a GM-licensed “all-new global small car” to be sold under the VinFast name." https://en.wikipedia.org/wiki/VinFast