The new Vietnamese automobile company VinFast made its debut at the Paris Auto show this week. British soccer star David Beckham and Miss Vietnam, Tr7847;n Ti7875;u Vy, presented two Vinfast models to the crowd.
Vinfast is Vietnam’s first major car manufacturer. It has existed for only about a year. And the country hopes that the automobile industry will power economic growth, just as it did for Japan and South Korea.
VinFast is part of Vietnam’s largest company, Vingroup. It has a budget of $3.5 billion and plans to have VinFast cars on the streets by next August.
Shaun Calvert, is a vice president of VinFast. He asked, “Where else in the world can you do this with this sort of speed?”
Calvert spoke during a tour of the huge factory complex in the northern Vietnamese port town of Haiphong.
The manufacturer will have the capacity to produce 250,000 cars yearly in the next five years or so. That is close to the number of cars sold in Vietnam last year, based on information from the Vietnam Automobile Manufacturers’ Association (VAMA).
Most cars sold in Vietnam are foreign products put together in the country. But a series of free trade agreements has reduced import duties and are opening up the market.
Beyond Vietnam’s market, VinFast leader Jim Deluca said, “We’re looking to expand both within ASEAN and outside.”
VinFast has imported foreign expertise to start the project.
Deluca, Calvert and three other members of its leadership team were once with American carmaker, General Motors. In June, GM agreed to give full ownership of its Hanoi factory to VinFast for it to produce small cars under a GM international license from 2019.
But, even with all the support, a move into the highly competitive automobile industry carries major risks.
Local auto assembly companies have tried - and failed - in Vietnam to sell domestic models. Regionally, companies such as Malaysia’s Proton or Australia’s Holden have struggled to win interest in their cars outside their home countries.
Bui Ngoc Huyen is chairman of Vinaxuki. That company tried unsuccessfully to establish a domestic automaker. Bui said Vingroup’s wealth should provide a better chance for success. But he warned, building a brand would take time.
“It will take several years for a new carmaker to fine tune its products” and win the trust of the buying public, he said.
Jim Deluca said VinFast’s early models would be “very affordable” to interest local buyers, but did not offer any further details on price. Deluca said VinFast believes national pride will bring in buyers.
“What we’re doing here is something special for the men and women of Vietnam,” he said.
Vingroup already leads the real estate market in Vietnam with Vinhomes. It also has entered the healthcare market with Vinmec, the food store business with Vinmart, and the tourism industry with Vinpearl resorts.
Deluca said, “There’s probably 4 million customers today who are associated with Vingroup in one way or another so it’s a huge brand….”
I’m Caty Weaver.
Caty Weaver adapted this story for Learning English based on Reuters news reports. Hai Do was the editor.
Words in This Story
debut - v. to appear in public for the first time : to make a debut
capacity - n. the amount of something that can be produced or managed by a factory, company, etc.
license - n. in a business arrangement where one company gives official permission to another company to do or make something
brand - n. a category of products that are all made by a particular company and all have a particular name
fine-tune - v. to make small changes to (something) in order to improve the way it works or to make it exactly right
affordable - adj. able to be paid for