VinFast has just successfully completed its SPAC merger and started trading on the Nasdaq stock market on August 15.
Now, the Vietnamese electric automaker announced plans to take another strategy regarding EV distribution in the US. Specifically, it aims to leverage dealers to sell its offerings.
For context, VinFast has already brought about 3,000 EVs to the North American market since 2022 and sold them through a direct-to-customer strategy.
US dealers’ insights
Some car dealers in the US voiced openness for VinFast’s possible landing in their offices. However, they stated that they must first learn the company’s plans before cooperating. It apparently includes information regarding VinFast’s dealer requirements, components distribution and sales approach, and warranty.
“Is there room for more brands? Yeah, there probably is. It’s just too early to tell. I’d need to see more before I could make an intelligent decision.”
George Glassman, Glassman Automotive Group President
VinFast’s Nasdaq debut on Tuesday saw its stock surpass Ford and GM’s market valuation to $85 billion. However, it declined 33.6% to $20 as of the market closing on Thursday.
Why is a distribution plan change necessary?
VinFast Chief explained that partnering with dealers will enable the company to cut costs in its plans to change its distribution strategy.
“Opening our own stores is great but it takes a lot of time. Joining forces with other partners to go faster has always been our nature.”
CEO Le Thi Thu Thuy (via Reuters)
The automaker further aims to launch new sales points in the region and other foreign markets.
“We are currently defining the terms of this new model and discussing with potential partners. More details will be announced in due course.”
CEO Le Thi Thu Thuy (via Reuters)
Challenges
Fink Automotive Group CEO Scott Fink emphasized that dealers must consider their reputation before partnering with VinFast.
“The dealer has to be concerned with their (own) reputation. If I sell a car to you and you can’t get a fender, you’re going to be pissed off at me. I’m not going to do that. The devil’s in the details.”
Scott Fink, Fink Automotive Group CEO
VinFast’s ability to compete with popular brands like Tesla, GM, Ford, and Hyundai, among others, is also among the top concerns of dealers in the US.
“The first thing you have to look at is are you going to be around in five years? That’s a big concern.”
Andrew DiFeo, Hyundai of St. Augustine Dealer Principal
They also believe the Vietnamese brand must present dealers with strong profit margins and competitive vehicle warranties.
“It is a death strategy. There is too much value extracted by serving dealers. That’s a strategy Wall Street will whip them on.”
Warren Browne, GM executive
On the other hand, Ricart Automotive Group CEO claims that some dealers may bet on VinFast despite its lack of brand popularity.
“If it’s a good product and it’s got a great warranty on it, Americans will buy it.”
Rhett Ricart, Ricart Automotive Group CEO
In addition, Galpin Motors President asserted that dealers are constantly eyeing business prospects. He even visited VinFast’s Vietnam factory in 2022 to meet CEO Thuy.
“Dealers are entrepreneurial and they’re risk-takers. Sales people love to be sold.”
Beau Boeckmann, Galpin Motors President
See Also:
- VinFast makes Nasdaq debut, valuation tops automotive giants
- VinFast celebrates the arrival of its first VF 8 shipment in the United States
- Luxury EV maker VinFast files for IPO in the United States
- Vietnam’s richest man bolsters $8 billion bet in electric vehicles
- VinFast introduces a mass-market EV, a Suzuki Jimny look-alike
VinFast’s US expansion is indeed constantly progressing with the automaker’s aggressive plans and strategies. It aims to advance in the global market with its luxury EV models and industry-leading customer support like its “Special Aftersales Policy.”
