The billionaire owner of six-month-old Vietnamese auto startup VinFast prepares a feat even Toyota Motor and Hyundai Motor couldn’t pull off during their starting days: sell a car in the U.S.
Pham Nhat Vuong, the Vietnam’s richest man and now in charge of the new automaker, wants the exporting electric vehicles to the lucrative American market in 2021 that he’s using as much as $2 billion of his own fortune to reach that goal. His money would account for half the capital investment of VinFast, which started to deliver cars to Vietnamese consumers with BMW-licensed engines previously this year and intends to expand into electric vehicles.
“Our ultimate goal is to create an international brand,” the 51-year-old tycoon stated in an interview at the Hanoi headquarters of the car company’s parent Vingroup JSC, which Vuong formed and holds the title of chairman. “It will be a really difficult road and we will have to put in a lot of effort. But there’s only one road ahead.”
The homegrown vehicles made under Vuong’s sprawling real estate-to-hospitals conglomerate would experience an uphill battle to succeed overseas. Automakers such as India’s Tata Motors and Malaysia’s Proton Holdings had a hard time to win over consumers away from their home turf. Even in Vietnam, VinFast Trading and Production LLC has strong competition from established foreign automakers such as Toyota, Ford Motor and Hyundai.
VinFast follows a long list of Chinese automakers that have also had ambitions to sell automobiles in the U.S. going back over a decade. Though the strategies have yet come to success, Guangzhou Automobile, Zotye Automobile, and others have set up regional sales units and research-and-development operations to show just how committed they are. Some Chinese brands have also showcased at American auto shows in recent years.
Vuong, whose net worth is $9.1 billion, is undaunted. Vingroup sold some shares in 2018 and he prepares to sell as much as 10% of his own to raise funds for the ambitious project. He currently owns 49% of VinFast, while the parent, Vingroup, owns 51%.
The automaker won’t be profitable for no less than five years, stated Vuong, adding the local market is “too small” and overseas sales are important to becoming profitable. Vuong directly owns 26% of Vingroup.