Vietnamese electric vehicle (EV) manufacturer VinFast is forging ahead with its ambitious plans to establish a strong presence in the United States. The company is gearing up to roll out a series of dealership partnerships across the nation, a strategy designed to complement its existing direct sales model in California and pave the way for greater market penetration.
According to a recent earnings report released in early October, VinFast has already garnered considerable interest from potential dealers. By September 30, 2023, the company had received applications and letters of intent from 27 dealers, collectively representing over 100 potential sales points spanning 12 different states in the U.S. These states include Florida, Texas, North Carolina, Virginia, Louisiana, New Jersey, and Arkansas, among others. Although the report did not specify the ultimate number of dealerships VinFast intends to establish, Duke Hale, an industry veteran advising the company, suggests that the process will unfold in multiple phases.
Hale emphasized the complexity of launching dealerships, stressing that the extensive paperwork and state filings involved would require time. He speculated that it might take up to 24 months to reach the desired dealer count. While it’s possible that a few VinFast dealerships could be operational in the current year, the number is expected to significantly increase in 2024.
Notably, these prospective VinFast dealerships will not compete with the automaker’s direct-sales model, which is exclusively operational in California. The 27 interested dealers will undergo thorough vetting, and most are likely to gain approval.
In recent developments, VinFast hosted meetings for potential retailers in Tampa, Florida, and Dallas, attracting a total of approximately 100 dealers. During these events, VinFast showcased its vehicles for testing, prompting most attendees to apply for one or more VinFast open points. Hale expressed enthusiasm about the caliber of dealers showing interest, describing them as “multigenerational, private, well-known names in their markets.” Many of these dealers are actively involved in or have previously participated in dealer councils for other automotive brands.
The surge of interest among dealers to secure a VinFast sales point suggests that not all of them will be able to secure a deal, and some may be left disappointed.
VinFast’s U.S. expansion efforts come in the wake of its successful initial public offering, which saw the company listed on the Nasdaq. While the stock price experienced an initial surge, it has since stabilized. Additionally, the company indicated that it might consider transferring some of its existing showrooms to dealers to support their early-stage network growth.
VinFast has introduced a range of models in Vietnam, including the VF 6, VF 8, and VF 9, with plans to launch the VF 7 in the near future. These models cover various segments from subcompact to midsize. In the U.S., the company aims to sell four crossovers and commence production at a new factory in North Carolina by 2025.
VinFast’s move to adopt a hybrid sales model is a crucial step in its global expansion strategy. The company, which initially manufactured gasoline vehicles in 2019, has shifted its focus entirely to EVs, prompting an expansion into North America, Europe, and parts of Asia. By utilizing third-party distributors in key global markets, VinFast aims to minimize the capital required for its expansion, with plans to be present in up to 50 global markets by the end of 2024.
Although VinFast’s largest market remains in Vietnam, it has reported a growing presence in North America, particularly in Canada. As part of its expansion efforts, the company has shipped significant quantities of its VF 8 model to both the U.S. and Canada.
VinFast’s strategy for the U.S. market includes introducing a diverse lineup of models, with the more affordable VF 6 and VF 7 to complement the premium VF 8 and VF 9 models. As the company navigates the competitive landscape, it seeks to establish a robust network of dealerships and demonstrate its commitment to becoming a prominent player in the American EV market.
Source: AutoNews (subscription required)