The Vietnamese manufacturer is off to conquer the international market. Unfortunately, the result is not at all worthy of the investment, the brand still needs money from the conglomerate to which it belongs.
Vinfast wanted to start strong from its launch in 2019, perhaps too strong. By quickly setting out to conquer international markets, the young Vietnamese manufacturer spent lavishly, boosted by an insane stock market valuation. Except that the somewhat failed launch in the USA, then in Europe, is now weighing on sales. Now that the effort in terms of communication is supposed to be made, with models available for delivery in Europe, the brand has lost international visibility. Sales are therefore trickle-down.
Fortunately, the brand can console itself with success in its local market. Another source of consolation, Vinfast continues to benefit from financing from the conglomerate Vingroup, the largest conglomerate in Vietnam. According to ReutersVinfast will be able to count on an additional 3.15 billion euros from its founder and Vingroup, even if the brand should find other external investors.
Losses 40% higher than last year
Vinfast has already benefited from 13.5 billion from the group and its subsidiaries, which allows the brand to pursue its ambitions, where other brands would have already declined.
Like other electric car startups, the Vietnamese manufacturer suffered a certain amount of speculation on the financial markets when it was listed on the stock market. Vinfast felt its wings growing with a stock market valuation that temporarily exceeded that of groups like Stellantis, Volkswagen or Ford. Unfortunately, this generally does more harm than good to these manufacturers, because reality comes back like a boomerang. Vinfast has not escaped the phenomenon.
The brand still recorded a loss of 773 million euros in the second quarter of 2024, i.e. losses 40% greater than over the same period in 2023. These losses should continue until 2026 where the manufacturer should be profitable, according to THE latest financial communications de Vinfast.
Vinfast still had to lower some ambitions. Among the suspended projects is that of a factory in North Carolina. However, the brand risks being faced with customs surcharges on the sale of its vehicles in the United States, but as volumes are low, this should not change anything.
Strong contrast between the local market and the international one
In 2023, Vinfast had somewhat disguised its sales figures, including in Vietnam. Many models were purchased by a taxi company belonging to Vingroup. This still seems to have given the brand a foothold, which now sells its models in a more natural way.
51,000 Vinfast electric vehicles were sold in Vietnam in the first ten months of the year. The small Vinfast VF3 model is the one that has dominated sales in recent months. But this model is currently absent from the international market.
The United States and Europe must make do with the single VF8. We do not have updated figures for the American market, but in Europe, Vinfast only registered 174 VF8s at the end of September. France represented more than 40% of European registrations, or 76 examples over the first nine months of the year. Except that many of these examples are registered by dealers, around 80%, which means that customers are rare.
Vinfast would have every interest in quickly adapting the VF3 to the European market, to try a different positioning. This may be his salvation. For the moment, the brand has rather focused on the VF6, which risks being devoured whole by the competition. It is far from won for Vinfast internationally.
Source: www.numerama.com
