Vietnam’s VinFast hopes to change its destiny with micro electric cars priced under $10,000 | Wilnesh News

Vietnamese automaker VinFast once became the world’s third most valuable car company, but it faced a big problem: It couldn’t sell enough cars.

Idle factories were hemorrhaging money, and the company’s financial health was threatened. After finding the U.S. market a tough nut to crack, Vinfast hopes its smallest and cheapest car yet — a roughly 10-foot-long all-electric mini-SUV priced at $9,200 called the VF3 — will be a go-to for Vietnam. “National Car” and became Vietnam’s “National Car”.

VinFast says the VF3 is designed for Vietnam and other Asian markets and is priced for “mass appeal.” Vingroup Chairman Le Thi Thuy said during an earnings call in April that it expected sales to be higher than earlier models that were mainly exported to Western countries.

When VinFast went public in the United States and listed on Nasdaq last year, it dreamed of joining the major leagues of global automakers. Its market value once surpassed General Motors Co. and Ford Motor Co. in late August.

Since then, investor enthusiasm has cooled, with the stock price falling below $4 from a peak of $82.35. VinFast faces construction delays The company said in an email that it was reviewing and evaluating “all aspects of the construction process” for a $4 billion plant in North Carolina. The company faces legal trouble over a crash in California that killed four people. This is also Dealing with allegations of patent infringement.

VinFast’s future is important to Vietnam, both because its ambitions dovetail with the Communist Party’s own goals and because parent company Vingroup plays an important role in Vietnam’s economy. The group was founded in Ukraine in the 1990s as an instant noodle company and now operates a variety of businesses.

VinFast reported a net loss of $2.39 billion last year, even as revenue grew 90%. In an effort to repair its tattered financial position, Vingroup recently sold its profitable commercial real estate unit Vincom Retail. In addition to the US$11.4 billion in financing injected into VinFast by the parent company from 2017 to 2023, Pham Nhat Vuong, the founder of Vingroup, also invested US$1 billion of his personal wealth. According to documents filed with the U.S. Securities and Exchange Commission.

“We will never let VinFast go,” he told Vingroup shareholders at the annual shareholder meeting in April. According to state media reports.

Tu Le, founder of consultancy Sino Auto Insights, said the VF3 will initially be sold in emerging markets in Asia, where car buyers switching from motorcycles to four-wheelers may not be as picky as Americans.

At only 3.1 meters long, 1.6 meters wide and high (10 feet long, 5.2 feet wide and high), it can squeeze into the tight alleys of Asian cities and still accommodate five people.

VinFast aims to sell 20,000 such cars in Vietnam this year, with deliveries set to begin in August. It is sold on Southeast Asian e-commerce site Shopee, with an initial deposit of about $2,000. The company said more than 27,000 people applied to buy the car in the first three days after orders opened on May 13.

Many, like 32-year-old Dieu Linh, are first-time car buyers. A businesswoman, she and her husband wanted to switch from motorcycles to cars to be safer and more comfortable in the heat or rain.

“The price of the VF3 is very attractive. But I would see how it performs on the road before making a deposit,” she said.

VinFast plans to start selling the VF3 in the Philippines this year and Indonesia, Thailand, the United States and Europe next year.

The company opened its first showroom in the Indonesian capital Jakarta in April and said it has sold about 600 SUVs to Indonesian companies. It has started building a factory in India.

Even in the Asian market, VinFast faces stiff competition, especially from China Electric vehicle manufacturer BYD, It has reached a large enough scale for cost-effective manufacturing. Chinese electric vehicle manufacturers such as BYD and Haima are expanding rapidly in Southeast Asia. But in Vietnam, where VinFast has a near-monopoly on charging infrastructure — charging stations are spread across the country, not just in big cities but also in more remote mountainous provinces — consumer distrust and nationalist sentiment toward Chinese products could put it at risk. Preliminary advantages, says Le Hong Hiep, visiting fellow at the Yusof Issa Institute of Southeast Asian Studies in Singapore.

BYD plans to launch three models – Atto 3, Dolphin and Seal – in Vietnam next month.

VinFast must increase sales to lower unit costs at its vast factory in Vietnam’s northern Hai Phong province, which can produce about 250,000 electric vehicles a year but is currently producing only a fraction of that.

“Idle factories will only burn money,” said Tu Le, an automotive consultant.

India, the world’s third-largest auto market by sales, offers the promise of scale, but only if VinFast builds its own factory there, allowing it to benefit from policies that protect local automakers. Ishan Raghav, editor-in-chief of Indian car magazine autoX, said high import taxes mean that even at $9,200, the VF3 is too expensive for Indians.

The VF3 is likely to appeal to Indian families looking for a small car suitable for traveling in India’s congested cities. But he said newcomers would have to build extensive sales and EV charging networks, which would take several years. “All of this—manufacturing, sales, service, and charging networks—is capital intensive and takes time,” he said.

Vingroup has formed a company called V-Green to build its own charging infrastructure in Vietnam and other major markets. VinFast Thailand CEO Vu Dang Yen Hang said it plans to build its own charging infrastructure in Thailand said in a March interview with The Associated Press.

VinFast is racing against time.

although Priority sales In the United States, the company sold less than 1,000 vehicles in North America last year and only about 35,000 globally, below its target of at least 40,000 vehicles. In 2023, approximately two-thirds of VinFast’s revenue will come from sales of taxi services owned by Vingroup. According to documents filed with the U.S. Securities and Exchange Commission.

Hiep said VinFast’s main challenge is improving financial performance.

“If they don’t sustain it long enough, they could go bankrupt,” he said.