Produced by | Tiger sniff car group
Author | Wang Xiaoyu
Edit | attentive
Header image | Visual China
Don't want to build a car boss, do not do real estate?
On April 21, three Hengchi 5s appeared in Guangzhou Evergrande Center, and Xu Jiayin, chairman of the board of directors of Evergrande, and the management team experienced Hengchi 5 in an all-round way, and also praised them one after another: "Beautiful! It's beautiful! Although in the past few months, Evergrande's main business has faced a severe test, but its Hengchi Automobile, is still actively promoting mass production, the company's goal is to strive to open pre-sales in the second quarter.
Chairman of the Board of Directors of Evergrande Xu Jiayin
In contrast, Pham Nhat Vuong, Vietnam's richest man who is also a real estate developer cross-border car builder, is now a mixed bag.
Behind him, the Vingroup Wenner Group covers real estate, supermarket retail, travel and entertainment, smart phones and other aspects. In 2017, Vingroup's high-end car brand VinFast was officially established.
Phan Ri Wang, the richest man in Vietnam
This year, VinFast has attracted both capital and market explosions: first, it was hand-picked by US President Biden to build a factory in the United States; then, it launched two pure electric models in the United States. Even more exaggerated, the company recently announced an IPO in the United States to raise $2 billion — not surprisingly, it will be the largest IPO in Vietnamese history.
Vietnam Xu Jiayin, creating the red flag of Vietnam
"I drove VinFast on the road and haven't been checked yet, because the traffic police don't know who's sitting inside."
Mr. Tan, who works in real estate development in Ho Chi Minh City, Vietnam, became the owner of the VinFast LUX A2.0 last year. At that time, he spent 1.13 billion VND to buy the car, which was equivalent to about 330,000 yuan at that time.
In terms of original product positioning, the VinFast LUX A2.0 is an executive-class sedan that competes directly with the BBA's sales pillar 56E (5 Series, A6, E Class). Although the starting price is more than 100,000 lower than the German luxury brand, because the people who buy VinFast are not rich or expensive, so in Vietnam, VinFast's brand status is somewhat similar to Hongqi in our country.
Mr. Tan told Tiger Sniff that there are three main categories of people who buy VinFast in Vietnam: vietnamese government officials, top executives of Vingroup Group, and owners of properties owned by Vingroup.
VinFast LUX A2.0
Mr. Tan, a Vingroup owner, told Tiger Sniff: "Vingroup has built the largest local community in Ho Chi Minh City, called Vinhomes Grand Park. There is a high-tech park next to the community, like Intel and Samsung are here. He also said that because he bought a house here, the developer would send a VinFast car purchase coupon worth 150 million Vietnamese dong (about 42,700 yuan).
Mr. Chen's VinFast LUX A2.0
In Mr. Chen's view, the owner's preferential purchase of a car is only one reason that prompted him to buy VinFast. As a Chinese in Vietnam, he believes that VinFast can help him better integrate into Vietnam's political and business circles.
The Vingroup Group, Chinese called the Wenner Group, does have a unique meaning and value in the hearts of vietnamese. Its founder, Phan Ri Wang, 53, Vietnam's richest man, was born into an ordinary family in Ha Tinh province, central Vietnam. However, he succeeded in his studies and later went to study abroad, living in Moscow and Kharkiv in Ukraine for many years. In Kharkiv, Phan RiWang scraped together $10,000 to open a Vietnamese restaurant.
Pan Riwang was constantly looking for opportunities around him, and soon he found that Ukrainians were in particularly strong demand for cheap and fast-filling instant noodles. So he gave up the restaurant and invested with friends in a food company called Technocom, launching the fast food brand Mivina. That's how the first pot of gold was earned.
In 2002, Phan Ri-Wan returned to Vietnam, first founding Vincom in Hanoi, a company engaged in the development of large shopping malls, high-end office buildings and apartments, and then Vinpear, a real estate project focused on hotels, luxury resorts, beach villas, water parks and golf courses.
In 2012, he merged Vincom and Vinpear, and Vingroup was born.
Located in Ho Chi Minh City's busiest central park area, the 461.3-metre-high Landmark Tower 81 of "Southeast Asia's Tallest Building" was developed by Vingroup with an investment of US$1.4 billion and integrates hotels, upscale apartments and retail.
Vingroup Landmark 81
Pan Riwang famously said: "Start a business to attack, not defend."
In 2017, after expanding his business to every aspect of the Vietnamese people, vietnam's richest man expanded the battlefield again, entering the auto industry that Vietnam had never been involved in before, and named the brand VinFast. The word is made up of Vietnamese abbreviations – Vi tNam (Vietnam) Fongcách (Style) Antoàn (Safety) Sángt o (Creative) Tiênphong (Pioneer).
Perhaps it is a coincidence that in 2017, Evergrande also began to lay out the automobile industry. But at the beginning, Xu Jiayin invested his first money in Jia Yueting, who built cars in the United States. In November 2017, Evergrande, through Season Smart (a wholly-owned company of Evergrande Health), planned to invest a total of US$2 billion in Jia Yueting FaradayFutrue based on a valuation of about US$4.4 billion.
But Pan Riwang was different, and at the beginning he chose to set up his own brand and build his own factory. However, VinFast did not go very well in the early stages of development, especially with frequent changes in the senior management. Like former Opel CEO Michael Lohscheller, who came to VinFast and announced his departure only five months ago. Until January this year, VinFast ushered in the new CEO Li Shi Qiushui, which helped VinFast to go to the United States to IPO and build a factory.
On the surface, the development path of VinFast is somewhat similar to that of Hengchi Automobile. However, as a long-term resident of Vietnam and engaged in the local real estate industry, Mr. Chen believes that there is still a difference between the Vingroup department and the Evergrande department.
"Vingroup, a company, does everything that prioritizes quality."
Mr. Tan further gave an example of the residential area developed by Vingroup in Ho Chi Minh City, Vietnam, which occupies more green area than residential area, even in Ho Chi Minh City, which is known as the "Vietnamese version of Shanghai", where the unit price of real estate is calculated in "gold" rather than "Vietnamese dong".
In addition, in terms of property management, many foreign big brand developers are not as good as Vingroup in Vietnam. "Vingroup's scale is not the first, but the quality must be the first."
So in his opinion, VinFast's car will certainly maintain the same high quality as Vingroup's house.
America loves Made in Vietnam?
Like most Southeast Asian countries, Vietnam is a market dominated by Japanese and Korean brands.
In March this year, Toyota Vietnam became the highest-selling car brand in Vietnam with a record of 7,977 units. It was followed by Hyundai, which sold 7,069 units; Kia, which sold 6,238 units; Mitsubishi, which sold 3,675 units; Honda with 3,604 units; VinFast with 3,471 units, and Mazda with 3,326 units.
Although the brand's total sales are not high, with a civilian-class SUV model Fadil (priced at 19,000 US dollars, about 120,000 yuan), VinFast still got the single model sales crown. In March, the VinFast Fadil became the best-selling model in Vietnam with sales of 2,567 units. This is followed by Toyota's Corolla Cross and Toyota Vios.
As one of the Asian countries with the highest auto import tariffs, Vietnam is an incremental market that many overseas car companies cannot enter. For example, among the German luxury brands, only Mercedes-Benz has set up subsidiaries in Vietnam, while BMW and Audi have been blocked out and charged high import taxes. As a result, pure imported models of the same class are much more expensive than locally assembled cars.
Mercedes-Benz Vietnam official website
"For example, if you buy a BMW 5 Series in Vietnam, the landing price will be at least more than 700,000." If it is a Mercedes-Benz E-class, it is about four or five hundred thousand in China. Mr. Chen of Vietnam told Tiger Sniff that he also bought a Mercedes-Benz GLC in Vietnam, and the purchase price at that time was VND 1.8 billion, equivalent to about 500,000 yuan, which was similar to the price of the current GRC in China of 402,500-476,800.
Therefore, many models that have not been localized in Vietnam are also subject to high import taxes. For example, Toyota Camry asks for 380,000 yuan in Vietnam, while the domestic price is only 179,800-269,800. In addition, a large number of Chinese car brands have also been blocked from the Vietnamese market, "the highest tax is China's cars, 70% to 75%. ”
Since a few years ago, the Vietnamese government has gradually relaxed import tariffs, but only by importing parts and components. Imported spare parts used to produce and assemble automobiles in Vietnam can enjoy a 0% tariff discount. This policy will be extended from 2021 until December 31, 2027.
Of course, this rule is a bit like opening a green channel for VinFast.
Because Vietnam does not have a perfect auto parts supply chain like the Chinese market, if you want to manufacture a domestic car in Vietnam, you can only rely on importing overseas auto parts. For example, VinFast used the BMW N20 series 2.0T engine decommissioned in 2017, plus ZF's 8AT transmission, and directly assembled it into a LUX A2 model priced at more than 300,000 yuan.
At the time, the car was unveiled at the 2018 Paris Motor Show, and VinFast paid a lot of money to bring in The Beckham platform. According to foreign media reports, the booth price of that Paris Motor Show was also high, as high as 5 million to 10 million US dollars, and even Volkswagen, Ford, Volvo, Bentley and other established manufacturers were not willing to spend money to participate in the exhibition.
The lady in the middle is Lai's Qiushui
In terms of spending money to build cars, Vietnam's richest man is indeed not soft. In addition to directly purchasing BMW's intellectual property, he also asked the Italian car design company Pininfarina to design for VinFast, and the "foundry emperor" Magna to do production and technical support.
However, just when everyone thought that VinFast was going to beat down japanese and Korean brands in the Vietnamese domestic market, VinFast CEO Lai Shi QiuShui announced the global expansion of the Vietnamese car brand - entering the European and American markets, building factories in the United States, and going to the United States for IPO.
First, in 2020, VinFast developed a high-end SUV based on the third-generation BMW X5 (F15) licensing platform, named "VinFast President President Limited Edition", which costs up to $164,000 (about 1.1085 million yuan). The plan was to start listing in Vietnam that fall and start delivering to the U.S. market the same year. In addition, VinFast also established its US headquarters in 2021.
The person who really helped VinFast start her journey to the U.S. is this year's new CEO, Lai, who has spent most of her career in recent years at Vingroup, holding related roles in industry, technology, finance, investment and international relations. Compared with the previous professional managers from the automotive industry, Lai's Qiushui has a good grasp of government relations and financing methods, at least close to Biden.
U.S. President Joe Biden, who previously posted on social media for VinFast, said: "This is the latest example of how my economic strategy works. "Because of VinFast's investment, more than 7,000 jobs will be created in the United States. Biden has even publicly stated that VinFast is a company that has returned to the United States after General Motors, Ford and Siemens to invest and create jobs.
Of course, the most important reason for Being hand-picked by Biden is because VinFast began to transform new energy vehicles.
Since 2021, the Determination of the United States to develop the new energy automobile industry has been highlighted. In March, Biden said $174 billion of the $2 trillion in infrastructure plan (the U.S. Jobs Plan) would be invested in the electric vehicle industry. In August, Biden also signed an executive order aiming to achieve 50 percent of U.S. auto sales to new energy vehicles by 2030. And just recently, Biden said after visiting the factory of American electric bus manufacturer Proterra through video online that the United States must increase the production of electric vehicles to catch up with and surpass China.
In fact, VinFast has a good grasp of the pace of expansion in the United States. At CES earlier this year, VinFast showcased its latest electric models, the VF8 and VF9. It is said that after the launch of these two cars, VinFast will adopt a battery rental business model. The vehicle is priced between $40,000 and $60,000, in direct competition with the Model 3, which starts at $46,000, and the Model Y, which starts at $58,000.
In a speech in Washington, D.C., Lai announced that he would go to the United States to build a factory
Just after the launch of the new car, the company's CEO Li Shiqiushui immediately announced the transformation plan - VinFast will become a pure electric vehicle company, completely abandoning fuel vehicles. Then in March, VinFast announced a $4 billion investment in the construction of a 15-unit electric vehicle plant in North Carolina, USA, starting construction in 2022 and starting production in 2024, with an initial investment of $2 billion.
The car was released, the factory was built, and the rest was almost paid. According to VinFast's plan, there are currently two financing avenues -
The first is a loan from the U.S. government's Advanced Technology Automotive Manufacturing (AVTM) lending program, which was created by congress in 2007 when Detroit's automakers were in crisis. According to its website, the agency is managed by the U.S. Department of Energy and still has nearly $18 billion in lending capacity.
The second is to go to the United States IPO, according to foreign media reports, VinFast has submitted an IPO application to the US SEC. It is reported that VinFast may seek to raise $2 billion through an IPO. Previously, it was valued at a maximum of $60 billion. If VinFast is successfully listed, it will be the largest IPO in the history of Vietnamese companies.
According to Pan Riwang, chairman of Vingroup, "If the conditions are not suitable, we can also wait." We ourselves are determined to promote and commit to this IPO, but the highest goal of the IPO is not to raise funds, but to establish Vinfast's position in the global automotive market. ”
"It's one of our financing options, but we need to prove to the U.S. government that we qualify." Pan Riwang said.
Write at the end
As a new car-making force in Vietnam, the rapid rise of VinFast is not entirely dependent on product power.
In terms of intelligent driving, intelligent cockpit and three electric technologies, China's new energy vehicles have obvious advantages. In contrast, VinFast's independent research and development capabilities are not strong. When the first fuel vehicles were sold, VinFast could only buy the technology that others decommissioned the engine. Now to build electric vehicles, it is even necessary to purchase parts from Chinese companies, such as Guoxuan Hi-Tech and Huineng Technology have announced cooperation with VinFast.
VinFast was able to fight back thanks to a good dad. On the one hand, it was the parent company Vingroup that won the support of Vietnam's local policies and resources behind it; on the other hand, it was the delicate relationship with the United States that cleared the way for VinFast's overseas expansion.
Although VinFast's model cannot be copied, the entrepreneurial spirit of Vietnam's richest man is still worth learning. While our new energy automobile companies are still busy transporting Cars made in China overseas to digest production capacity, VinFast has begun to build factories in the United States and Germany.
As Wei Jianjun, chairman of Great Wall Motors, said: "Globalization must go, we only have two choices, die at home or die abroad, I think only go out to have hope." ”
Going out is not only the export of products, but also the integration of resources such as capital, technology, talents and other resources from the international scope, and even the globalization of profound interaction and interconnection in culture and trade.
VinFast followed this path.