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The Star
4 days ago
- Automotive
- The Star
Vietnam's richest man shifts strategy after US$14bil bet on EVs
HANOI: Pham Nhat Vuong (pic) spent billions of dollars on an unsuccessful push to turn his upstart electric automaker into a major player in the US and Europe. Now, Vietnam's richest man is changing tack - betting his path to halting deep losses at VinFast Auto Ltd runs instead through Asian markets like India, Indonesia and the Philippines. It's the latest twist in an against-the-odds quest by the 57-year-old property tycoon to build a global carmaker. At least US$14 billion has already been poured into VinFast, including funding from Vuong's conglomerate Vingroup JSC, its affiliates and external lenders - as well as more than $2 billion of his own fortune. He says he's willing to support VinFast until his money runs out. Vuong's commitment has kept the company afloat even as losses mount. Last year it booked $1.57 of costs for every $1 of sales and logged a $3.2 billion loss. It's a race against time, said Tu Le, founder of Detroit-based auto consulting firm Sino Auto Insights. While VinFast is now gaining traction in Vietnam, it's unclear whether it can build a presence in Asia quickly enough to compete against rivals from China and elsewhere. The opening of its first overseas assembly plant in India earlier this month is a crucial piece in Vuong's Asia pivot. The factory near Thoothukudi, the Indian port city, will be capable of producing 150,000 vehicles annually for South Asia, the Middle East and Africa. It's part of $500 million VinFast will spend in its initial India foray - an investment the company expects to eventually grow to $2 billion. In June, the company inaugurated its second Vietnam plant that initially can produce 200,000 vehicles annually, and it's months away from a planned opening of a smaller factory in Indonesia. The new target markets are "late bloomers' in terms of EV sales "but hold tremendous potential and are currently entering a vibrant phase of growth,' the company said. The expansion plans follow VinFast's push to establish itself in North America and Europe. But the effort was marred by initial bad reviews of its cars and a recall over malfunctioning software. Of the company's 97,399 global deliveries in 2024, about 90% were in Vietnam. Last year it delayed a planned North Carolina EV factory until 2028. The southern half of Asia, however, is home to rapidly growing economies with well over 2 billion consumers. Rates of car ownership are lower than in the West and there are fewer established domestic brands. But it's less affluent, meaning demand likely will be driven by smaller cars with slimmer profit margins. "Like many other companies, VinFast makes short-term adjustments to its business plans in response to changing circumstances,' the company said in a statement. Since VinFast commenced operations in 2017, competitive and inexpensive Chinese EV-makers have emerged, a threat not just to startups but also giants like Volkswagen AG and Tesla Inc. While there's less competition in South-East Asia than in the West, "that's going to change when the Chinese bring the price war,' Le said. If VinFast can't establish itself before this, "I don't know how much future it'll have outside Vietnam.' Vuong expects VinFast to break even at the end of next year. Filings show that 92% of its cumulative revenue over the last four years came from Vietnam. One-third of that total came from related parties. GSM Green and Smart Mobility Joint Stock Co., a taxi company in which Vuong holds a 95% stake, has purchased thousands of VinFast vehicles. In other words: Vuong is moving money from one pocket to another. Establishing a new car brand isn't easy. It takes time to gain brand recognition and customer trust, and to build out networks of service centers and charging stations, said Thanachai Vorachaivanich, a managing director with automotive analytics firm Proliance Co. Several analysts said VinFast would've been better off establishing itself in Vietnam first instead of its everywhere-at-once approach, which is costly and uncertain. VinFast grew out of Vingroup, a conglomerate involved in everything from real estate to hospitality and whose revenue amounts to around 1% of Vietnam's gross domestic product. Its property development arm is the most profitable, and has helped bankroll the EV maker. Vuong has channeled at least $8 billion from his corporate group into VinFast as grants, loans and conversions of debt to equity. VinFast remains a financial drag on Vingroup's results, said Ken Foong, an analyst with Bloomberg Intelligence. But that might not matter all that much to Vuong, who controls Vingroup and has a $11 billion fortune, according to the Bloomberg Billionaires Index. Barring an economic downturn in Vietnam or a drastic change in Vingroup's access to capital, the real estate business might generate enough money to sustain the carmaker as long as Vuong wants, Foong said. Dan Gittleman, managing partner at automotive software consultant SanBoca Insights, has turned from skeptic to believer in Vuong's vision. Two to three years ago, "I said: 'Zero chance that this guy could do it',' Gittleman said. But the company has learned from its mistakes, grown well in Vietnam and is now in a good position to expand overseas, according to Gittleman. "The name pops up way more than you would think with people in the automotive world,' he said. "Even here in Florida I've seen a few of 'em on the road.' - Bloomberg
The Star
04-08-2025
- Automotive
- The Star
Vietnam's Vingroup Plans to build US$14.3 billion port complex in the northern city of Haiphong
HANOI (Bloomberg): Vietnamese conglomerate Vingroup JSC plans to invest about 373.84 trillion dong (US$14.3 billion) to build a seaport and logistics centre in the northern city of Haiphong, according to a statement on the Ho Chi Minh City Stock Exchange website. The project will consist of three phases and construction will run from 2026 until 2040, the statement said. Vingroup will use its own funds to finance about 15% of the total investment costs and seek external sources to pay for the remaining 85%. Vingroup's shares rose as much as 6.9% on Monday, the most in three weeks, and were set to end a four-day losing streak. The advance pushed this year's gain to 174%. The conglomerate has been on an expansion spree in recent years. It broke ground in April on a coastal tourism-urban complex on the outskirts of Ho Chi Minh City with investment capital of around 282.8 trillion dong. It also plans to develop 25.5 gigawatt-hours of renewable energy and liquefied natural gas power projects by 2030. Its electric vehicle unit VinFast Auto Ltd. inaugurated a factory in the Indian state of Tamil Nadu with an initial production capacity of 50,000 vehicles on Monday. -- ©2025 Bloomberg L.P.
Bloomberg
13-05-2025
- Business
- Bloomberg
Vinpearl Shares Surge by Limit in Vietnamese Trading Debut
Shares of Vinpearl JSC jumped by the limit in their trading debut as the hospitality unit of Vietnam's largest business empire became one of the country's biggest listed companies. The stock soared 20% to 85,500 dong on the Ho Chi Minh City Stock Exchange as of 9:27 a.m. Tuesday after listing about 1.793 billion shares at an initial price of 71,300 dong apiece. That gave the company, a unit of Vingroup JSC, a market value of around 153.3 trillion dong ($5.9 billion), placing it among the largest stocks in the benchmark VN Index.
Bloomberg
24-04-2025
- Automotive
- Bloomberg
VinFast to Open India Factory June 30, Indonesia Plant in October
By Updated on Save Vietnamese electric vehicle maker VinFast Auto Ltd. is pushing expansion into Asian markets instead of North America and Europe, founder Pham Nhat Vuong said during a Hanoi shareholders' meeting for parent Vingroup JSC. VinFast has no current plans to boost sales in North America and Europe due to high logistic fees and will instead focus on India, Indonesia and the Philippines, as well as the Vietnam market, said Vuong, who is also the company's chief executive officer.
