Car manufacturer VinFast shifts its attention from the Western market to Asia

In the bustling landscape of the automobile industry, VinFast, a Vietnamese automaker, is making waves with its ambitious expansion plans. Founded in 2017, the company has grown from a local player to a regional contender, thanks in part to the substantial investments made by its parent company, Vingroup.

Vingroup, a diversified conglomerate operating in real estate and hotels, has been a significant backer for VinFast. The most profitable segment within Vingroup has been its real estate division, which has helped support the loss-making automaker.

In 2024, VinFast delivered 97,399 vehicles, with 90% of them sold within Vietnam. However, the company's founder, Pham Nhat Vuong, is looking beyond Vietnam's borders. Vuong, who has invested over $2 billion of his personal wealth into VinFast, is shifting the company's strategy to focus on Asian markets like India, Indonesia, and the Philippines.

This strategic shift is evident in VinFast's recent initiatives. The company is constructing its first overseas assembly plant in India, which will produce 150,000 vehicles annually for Southeast Asia, the Middle East, and Africa. Additionally, VinFast plans to establish a smaller factory in Indonesia within months.

Analyst Ken Foong from Bloomberg Intelligence believes that Vuong's financial backing will likely continue to support VinFast, barring a significant downturn in the Vietnamese economy or Vingroup's loss of access to capital.

Despite the challenges, VinFast aims to achieve profitability by the end of next year, according to Vuong. The company's entry into new markets is timely, as they are currently in a dynamic growth phase, albeit considered "latecomers" in electric mobility.

VinFast's expansion comes amidst rumors of a European withdrawal, which the company has denied. Instead, VinFast aims to strengthen its European presence. The company's planned North Carolina plant has been delayed until 2028, but VinFast remains committed to establishing a foothold in the region.

As of now, 92% of VinFast's revenue comes from Vietnam. However, with its strategic expansion, the company is poised to diversify its revenue streams and solidify its position as a key player in the Asian automobile market.

Meanwhile, at least $14 billion has been invested in VinFast since its inception. A third of VinFast's revenue comes from related companies like GSM Green and Smart Mobility, which Vuong holds a 95% stake in. This interconnectedness suggests a long-term commitment to the development of the VinFast brand and its vision for the future of mobility.

In conclusion, VinFast's strategic expansion into Asian markets, coupled with its commitment to achieving profitability, positions the company for a promising future. With the backing of its parent company, Vingroup, and the support of its founder, Pham Nhat Vuong, VinFast is poised to make a significant impact in the global automobile industry.