The leaders of VinFast automobile company belonging to Vingroup group of Vietnamese billionaire Pham Nhat Vuong recently announced that the company is about to stop producing gasoline-powered cars and focus on making electric cars. This move caused a stir in public opinion, many of which said they had lost confidence in the company.
On the evening of January 5 at the CES 2022 consumer electronics and technology exhibition in Las Vegas, USA, VinFast Global General Director Le Thi Thu Thuy announced that the company would stop producing vehicles with internal combustion engines and officially become a 100% electric car company by the end of 2022.
The female general director’s statement was made when she introduced 5 electric car models of VinFast, VF5, VF6, VF7, VF8, and VF9 at the exhibition. All are in the line of sport utility vehicles (SUVs) of different sizes.
Ms. Thuy’s statement marked VinFast’s abandonment of the gasoline-powered car program after only nearly 3 years since cars with Lux and Fadil labels assembled by the company rolled on Vietnamese roads.
In the two years 2020 and 2021, VinFast sold a total of more than 60,000 Lux and Fadil cars, accounting for about 10% of Vietnam’s market share, but still too small compared to the design capacity of up to 250,000 vehicles per year of VinFast factory.
Besides, in the years since its operation, VinFast has continuously suffered losses. Information updated until the fourth quarter of 2021 shows that the firm suffered a record loss of VND11.3 trillion (more than $491 million) in the first half of the year, nearly doubling compared to the same period in 2020 then the loss was VND6.6 trillion.
Reacting to VinFast’s announcement that it was about to stop producing gasoline engine cars, many Lux and Fadil car owners expressed on social networks that they were “shocked” and “worried” about the company’s maintenance and repair services for their cars in the future.
Speaking to reassure those interested, Mr. Hoang Chi Trung, General Director of VinFast Trading Vietnam, said through the Vietnamese press that VinFast has fully planned the number of components and spare parts with 1.5 times the quantity than usual to ensure customer service.
Mr. Trung affirmed that VinFast does not turn its back on old customers and is committed to serving the entire life cycle of each car sold, as quoted in the domestic press.
However, VOA observed that many customers of VinFast in particular and Vingroup, in general, continued to give opinions that VinFast’s sudden announcement of its plan to stop making petrol cars was a strong and latest blow impact on consumer confidence, especially considering the past is that this group has repeatedly discontinued different products and services, sometimes quite unexpectedly.
According to VOA’s research, in the past few years, Vingroup has abandoned business efforts in areas including supermarket retail, airline, telephone, and TV.
Discussing on social networks about Vingroup opening and closing business segments too often and quickly, many people noted that that approach is difficult to create the core value of the corporation and is difficult to gather loyal customers.
Engineer Nguyen Lan Thang, an activist for social progress, commented to VOA:
“Regarding Vingroup, in addition to the real estate industry, their other products are very catchy. They use media to cover up the disadvantages of their products. Smart consumers certainly see problems right away in supermarket systems or phone products, or most recently, electric motorbikes.”
As for the fact that VinFast has just announced to stop gasoline cars after less than 3 years to focus on making electric cars, many people question whether anyone can be sure that after a few years VinFast will not announce that it will give up electric cars to switch to a new production and business direction.
Activist Nguyen Lan Thang commented to VOA that VinFast’s latest move is “a very terrible thing that hits consumer confidence” and has consequences for its future products.
“Regarding the company’s electric car products, consumers have now exchanged information, pointed out very inadequate points, and doubted the feasibility of VinFast’s strategy, not knowing if they could last long? Consumers are increasingly skeptical and anxious. With that doubt and worry, I am sure that Vingroup’s business will be very difficult in the coming period.”
VinFast recently announced plans to open factories and business facilities for electric vehicles in the US and Germany. With long-term knowledge in the automotive industry, Dr. Truong Quy Hoang Phuong, an expert in the architecture of new generation electric vehicles of BMW, told VOA that these are tactical steps of VinFast but not necessarily purposefully targeting the European and American markets, but targeting the area around Vietnam.
Phuong analyzed that VinFast will only combine with a few foreign partners to produce and assemble cars in small quantities to explore and create brand awareness in the US, Europe, and then on that platform, the company will do business in Asia or be a partner for electric car companies in Southeast Asia, and that is the main purpose.
Engineer Phuong predicts that VinFast is very unlikely to be able to compete successfully and profitably in the US and German markets, where there are many well-known car manufacturers such as Tesla, BMW, Mercedes, etc. VinFast is still very new and has no name.