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29 views3 pages

short-case-vinfast-2

Uploaded by

Zoelle Suo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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SHORT CASE

VINFAST – NOT SO FAST? 1

VinFast is a Vietnamese automotive company founded in 2017 by Vingroup, one of biggest


private conglomerates in Vietnam. More than 99% of VinFast was controlled by its
billionaire founder Pham Nhat Vuong, Vietnam’s wealthiest man. The whirlwind story of
Vingroup has been amazing. In August 2022, VinFast made the strategic decision to move
away from petroleum-powered cars by becoming entirely an EV brand. The EV market is
expected to grow 24% each year, worth nearly $1 trillion by 2028.
The Vietnamese startup made history earlier in 2023 when its $160 billion stock market
valuation was more than General Motors, Ford, and Volkswagen combined after it listed as a
so-called “special purpose acquisition company” (SPAC). By September 2023, its valuation
had dropped to just below $40 billion but it was still worth more than Hyundia’s or
Renault’s. 2

VinFast aspired to become a global automotive brand, in the same league as Tesla and legacy
brands like Toyota and GM. It generated some buzz for its brand when President Biden
tweeted about the brand – triggering 10,000 pre-orders – after the company announced it
would invest $4 billion to build a plant in North Carolina, thereby creating 7,000 jobs.

1
Prof. Kristiaan Helsen (HKUST) prepared this case study for the sole purpose of class discussion.
2
https://finance.yahoo.com/quote/VFS?p=VFS&.tsrc=fin-srch, accessed September 23, 2023.
In September 2023, the company announced that it had delivered 9,535 vehicles in the second
quarter of 2023, a fivefold jump from the first quarter. However, of the 11,300 vehicles sold
in the first half of 2023, over 7,000 had been sold to GSM, a Vietnamese taxi company
controlled by VinFast’s parent. There had been some early setbacks. In early 2023, the firm
recalled nearly 2,800 vehicles of its SUV VF8 that had been sold locally to replace a bolt.
The first shipment of EVs to the US in December 2022 had been delayed. VinFast had to
carry out a major recall in the US market following a warning that a software error could
increase crash risks. In the short time span that it had been available, US car reviewers had
been harsh describing its EVs as “unacceptable”, “return to sender”, and “basic functions
don’t work reliably”. Car and Driver ranked the VF8 model 12th among “Best Electric
SUVs.” 3
In the US, it launched the VF8 model in early 2023. The VF8 - a mid-sized SUV – sold for
about $50,000. The launch ad highlighted the car’s Italian design, the big screen size, AI
voice assistance, 11 airbags, and the car’s 10-years unlimited battery warranty. 4
Despite the early hiccups, VinFast had big global ambitions. By September 2023, it had
shipped 2,100 EVs to the US. The VF8 model had been approved by a European regulator as
compliant with EU standards. VinFast planned to ship the first VF8 models to France,
Germany, and the Netherlands in Q4 2023. This model would retail at €50,990 in France. The
China-made Tesla Y started at €46,000. Europe was one of biggest markets for Chinese EV
makers such as Geely and BYD – with almost 70,000 EVs shipped in the first seven months
of 2023, nearly triple the same year-ago period. In September 2023, the EU announced it
would probe government subsidies provided to Chinese carmakers (including China-made

3
https://www.caranddriver.com/vinfast/vf8, accessed September 25, 2023.
4
https://www.youtube.com/watch?v=pjH6d3VAKNk, accessed September 25, 2023.
Teslas). Should the probe conclude that punitive duties on China-made EVs were warranted,
VinFast could find its cars more competitively priced.
VinFast also announced plans to open a plant in Indonesia, targeting production in 2026 with
an output of 30,000 to 50,000 units. The Indonesian facility would become VinFast’s third
manufacturing facility besides its main one in Haiphong, Vietnam, and a new plant in North
Carolina, slated to start operating in 2025. VinFast also planned to create a crack markets
such as India, Malaysia, the Middle East, Latin America, and Africa.
In a market dominated by Tesla and Chinese EV brands, can this Asian upstart make an
impact? Could it become one of the first global brands with roots in Vietnam? Only time can
tell.
Sources: https://www.reuters.com/business/autos-transportation/vinfast-discloses-revenue-
surge-first-report-since-blockbuster-debut-2023-09-21/;
https://www.ft.com/content/f906c14a-8cf6-45e4-b543-20aac5ad11de;
https://www.caranddriver.com/vinfast/vf8; https://www.reuters.com/business/autos-
transportation/vinfast-deliver-evs-europe-this-year-eu-probes-china-rivals-2023-09-21/;
https://vinfastauto.us/; and https://www.campaignasia.com/article/can-vinfast-become-a-
global-electric-vehicle-brand/480535.
DISCUSSION QUESTIONS
1) In a market dominated by Tesla and Chinese EV brands, can this Asian upstart make
an impact or will it struggle to be noticed?
2) Rather than entering other EMs, VinFast decided to focus on the US EV market as its
first global foray. How do you assess this decision?
3) What will VinFast have to do on the branding front to achieve its global ambitions?
What are the two or three things VinFast can do to strengthen its case?

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