The main issue facing Vietnamese automaker VinFast, which was briefly the third-most valuable automobile firm in the world, is that it is unable to sell enough vehicles. The financial stability of the corporation is jeopardized by idle factories, which cost money. Vinfast is expecting that the VF3, a nearly 10-foot-long, pure battery electric miniSUV priced at $9,200, will become Vietnam’s “national car” and win over customers in Asian markets after finding the U.S. market to be difficult to penetrate.
According to VinFast, the VF3 is priced for “mass appeal” and was created especially for the Vietnamese and other Asian markets. Le Thi Thuy, the chairperson of Vingroup, stated during an earnings call in April that the company expects greater sales for it than for the previous models, which were primarily intended for export to Western nations.
When VinFast began selling in the United States last year and registered its shares on the Nasdaq, its market value momentarily eclipsed that of General Motors Corp. and Ford Motor Co. in late August; the company had aspirations of competing with the world’s largest manufacturers.Â
Since then, investor fervor has subsided, and the company’s shares have dropped from a peak of $82.35, trading below $4. The $4 billion facility that VinFast is building in North Carolina is running behind schedule. The firm sent out an email stating that it is analyzing and assessing “every aspect of the construction process.” Due to a collision in California that claimed four lives, it is currently in legal difficulties. It also addresses claims of patent infringement.
The future of VinFast is important for Vietnam because of its parent business, Vingroup’s significant economic influence in the country as well as the fact that its objectives align with those of the Communist Party. Today, the conglomerate operates a wide range of companies, starting out in the 1990s as an instant noodle manufacturer in Ukraine.
Even though revenue increased by 90%, VinFast reported a net loss of $2.39 billion in the previous year. Vingroup recently sold Vincom Retail, its thriving commercial real estate division, to help repair its damaged finances. According to a filing to the U.S. Securities and Exchange Commission, Vingroup’s founder, Pham Nhat Vuong, has pledged $1 billion of his own wealth on top of the $11.4 billion in capital the parent firm injected into VinFast in 2017–2023.
At the Vingroup shareholders’ annual general meeting in April, he reportedly declared, “We will never let VinFast go,” according to official media. According to Tu Le, the founder of the consultancy Sino Auto Insights, the VF3 will first be launched in growing areas in Asia, where consumers transitioning from motorcycles to four-wheelers may not be as picky as Americans.
Its dimensions are only 3.1 meters long by 1.6 meters wide by 5.2 feet high, or 10 feet long by 5.2 feet broad), thus it may fit into small spaces in Asian cities while still holding five people.
VinFast plans to deliver the first 20,000 of these vehicles in August, with the goal of selling them in Vietnam this year. With a down payment of roughly $2,000, it is being offered for sale on the Southeast Asian e-commerce platform Shopee. In the first three days following the opening of orders on May 13, the company reports that over 27,000 customers applied to purchase the car.Â
Will VinFast release VF3 in India?
The possibility of scale is present in India, the third-largest automobile market in the world by sales, but only if VinFast establishes a factory there and takes advantage of Indian automaker protection laws. Ishan Raghav, the managing editor of the Indian vehicle magazine autoX, stated that high import tariffs make the VF3 too costly for Indians, even at $9,200.
Families in India may find the VF3 appealing if they’re searching for a little car with enough range to navigate around the country’s congested cities. It will take several years for entrants to establish extensive sales and electric vehicle charging networks, he added. “All of these – manufacturing, sales and service, and charging networks – are capital intensive and take time,” he stated.
