Vietnam’s VinFast wants to become international car brand
Vietnamese auto startup VinFast, part of industrial conglomerate VinGroup of Vietnamese billionaire Pham Nhat Vuong, plans to make its car an international brand and prepares to sell gasoline and electric versions them in the US, Europe and Russia by 2021, Bloomberg News reported.
With the move, VinFast, which began delivering cars with BMW-licensed engines to Vietnamese buyers earlier this year, plans to take on established brands such as Toyota and Honda on the international stage, Vuong told the newswire.
However, analysts note that VinFast faces an uphill battle to succeed overseas as can be seen by the fate of other carmakers such as India’s Tata and Malaysia’s Proton, which struggled to win over consumers away from their domestic market. Even in Vietnam, VinFast has formidable competition from established foreign players such as Toyota, Ford and Hyundai.
Competitive markets
VinFast follows a long list of Chinese automakers that have also had ambitions to sell vehicles in the US, going back more than a decade. Though the plans have yet come to fruition, Guangzhou Automobile, Zotye Automobile and others have set up local sales units and research-and-development operations to show just how serious they are. Some Chinese brands have also exhibited at US auto shows in recent years.
The automaker will not be profitable for as many as five years, Vuong said, adding the local market was “too small” and overseas sales were key to becoming profitable.
But VinFast will have to overcome the daunting task of winning over demanding consumers in the US and other developed markets, where emissions and crash standards are stringent.
Strong brand is the key
VinFast must clear several high hurdles to compete outside Vietnam, Bloomberg News cited Michael Dunne, CEO of Hong Kong-based automotive consultant ZoZo Go, which specialises in the Asian market.
“It will be some time before the company is ready to compete in the US — still the world’s toughest market,” he said, adding that “you need a solid brand name.”
Many consumers prefer a second-hand Honda Motor Co. or Toyota vehicle over a new car with an unfamiliar brand name, Dunne said. The Vietnamese automaker will need to produce at least 100,000 vehicles a year to be cost competitive, develop a global brand and establish a parts-and-services network, he said. Still, VinFast has an opportunity to crack smaller Southeast Asian markets, Dunne added.
Vietnamese auto startup VinFast, part of industrial conglomerate VinGroup of Vietnamese billionaire Pham Nhat Vuong, plans to make its car an international brand and prepares to sell gasoline and electric versions them in the US, Europe and Russia by 2021, Bloomberg News reported. With the move, VinFast, which began delivering cars with BMW-licensed engines to Vietnamese buyers earlier this year, plans to take on established brands such as Toyota and Honda on the international stage, Vuong told the newswire. However, analysts note that VinFast faces an uphill battle to succeed overseas as can be seen by the fate of other...
Vietnamese auto startup VinFast, part of industrial conglomerate VinGroup of Vietnamese billionaire Pham Nhat Vuong, plans to make its car an international brand and prepares to sell gasoline and electric versions them in the US, Europe and Russia by 2021, Bloomberg News reported.
With the move, VinFast, which began delivering cars with BMW-licensed engines to Vietnamese buyers earlier this year, plans to take on established brands such as Toyota and Honda on the international stage, Vuong told the newswire.
However, analysts note that VinFast faces an uphill battle to succeed overseas as can be seen by the fate of other carmakers such as India’s Tata and Malaysia’s Proton, which struggled to win over consumers away from their domestic market. Even in Vietnam, VinFast has formidable competition from established foreign players such as Toyota, Ford and Hyundai.
Competitive markets
VinFast follows a long list of Chinese automakers that have also had ambitions to sell vehicles in the US, going back more than a decade. Though the plans have yet come to fruition, Guangzhou Automobile, Zotye Automobile and others have set up local sales units and research-and-development operations to show just how serious they are. Some Chinese brands have also exhibited at US auto shows in recent years.
The automaker will not be profitable for as many as five years, Vuong said, adding the local market was “too small” and overseas sales were key to becoming profitable.
But VinFast will have to overcome the daunting task of winning over demanding consumers in the US and other developed markets, where emissions and crash standards are stringent.
Strong brand is the key
VinFast must clear several high hurdles to compete outside Vietnam, Bloomberg News cited Michael Dunne, CEO of Hong Kong-based automotive consultant ZoZo Go, which specialises in the Asian market.
“It will be some time before the company is ready to compete in the US — still the world’s toughest market,” he said, adding that “you need a solid brand name.”
Many consumers prefer a second-hand Honda Motor Co. or Toyota vehicle over a new car with an unfamiliar brand name, Dunne said. The Vietnamese automaker will need to produce at least 100,000 vehicles a year to be cost competitive, develop a global brand and establish a parts-and-services network, he said. Still, VinFast has an opportunity to crack smaller Southeast Asian markets, Dunne added.
