America has always had an attractive car market which was once the largest in the world. Though overtaken by China in 2009, the US market is still huge and has averaged 17 million units annually over the past few years. Many brands are present in the market and competition is tough, besides the fact that emission and safety regulations are also stringent.
Nevertheless, Vietnam’s Vinfast intends to enter the market and its ambitious plans are not only to sell SUVs there but also make them in the country. After looking at incentives offered by various states, it settled on North Carolina to build its factory with an initial investment of US$2 billion. It is the state’s first vehicle manufacturing plant and the largest economic development announcement in North Carolina’s history. VinFast’s project is estimated to grow the state’s economy by at least US$71.59 billion over the next 32 years,
The factory, on an 800-hectare site, will have an annual capacity of 150,000 vehicles and start rolling them out from the second half of 2024. Besides SUVs, the factory will also make EV battery packs and electric buses.
Vinfast’s first factory in Haiphong, Hanoi.
“Having a production facility right in the market will help VinFast to proactively manage its supply chain, maintain stabilized prices and shorten product supply time, making VinFast’s EVs more accessible to customers, contributing to the realization of local environmental improvement goals,” said Le Thi Thu Thuy, VinFast Global CEO and Vice Chair of the Vingroup. The Vingroup was founded by Pham Nhat Vuong, Vietnam’s first billionaire and its richest person.
The US factory will be Vinfast’s third production site following the first one in Haiphong, Vietnam. It also acquired a GM factory in Hanoi as well as GM’s proving grounds in Australia. However, it decided to later sell off the proving grounds.
For its US business, Vinfast plans to spend $200+ million for a headquarters in Los Angeles and set up a network of more than 60 outlets with aftersales centres this year.
The 5-year old carmaker currently has 2 fully electric SUVs, the VF8 and VF9 (previously known as VF e35 and VF e36), which were styled by Pininfarina. The smaller VF8 has 2-wheel drive and all-wheel drive with one or two electric motors and a 90 kWh battery claimed to give 500 kms of range. The larger VF9 has three rows of seats and dual motors for all wheel drive. The battery pack has a capacity of 106 kWh which is claimed to be good for around 482 kms of cruising range.
Like other Asian brands that entered the US market, it’s a gamble that Vinfast is taking, especially as it is so new. However, its lack of reputation may also work as people will not have preconceived notions about the brand and may assume that being Asian, it will have the sort of quality and reliability for which Japanese products have long been known. Being ‘Made-in-America’ may also be helpful in gaining acceptance but ultimately, Vinfast will still have to fight for its place in the market against other established brands.
Keyword: Vietnam’s Vinfast to build and sell fully electric SUVs in US market