Billionaire Pham Nhat Vuong revealed a huge ambition with Vinfast: Accepting a loss in 5 years, will bet $ 2 billion on pocket money to sell cars to the Americans in 2021.

Bloomberg of the US recently had an interview with Vingroup Chairman Pham Nhat Vuong. At the beginning of the article, the American reporter revealed that the billionaire behind the Vietnamese car brand just 6 months old Vinfast is planning to achieve the feat that even the “old” names like Toyota and Hyundai also could not achieve it when he first started his career: Mr. Vuong wants to sell cars to Americans!

Pham Nhat Vuong is the richest man in Vietnam. With the latest business in manufacturing cars under the Vinfast brand, he is aiming to expand into electric cars for sale in potential US schools by 2021. To accomplish that plan, he intends to invest about 2 billion USD from its personal assets. This amount will account for half of Vinfast’s investment – the company just started shipping the first cars to Vietnamese consumers this year.

“My ultimate goal is to create a global brand,” the 51-year-old billionaire said in an interview with Bloomberg. “It is definitely a very difficult road and we will need a lot of effort. However, there is only one road ahead.”

Undeniably, Vinfast will have to face a very difficult battle to succeed in foreign markets: Car manufacturers such as Tata of India and Proton of Malaysia are the clearest evidence for the failure. failure in the market outside of home country. Even in Vietnam, Vinfast also faces fierce competition from foreign companies such as Toyota, Ford or Hyundai.

Before Vinfast, a series of Chinese automakers also embraced the ambition to sell cars to Americans for more than a decade. Although the plan is not yet bearing fruit, manufacturers like Guanshou Automobile or Zotye Automobile and many other brands have set up sales branches in the US and even created development research laboratories to show that Their serious effort. Several Chinese brands have also taken part in auto shows in the US in recent years.

Despite these things, billionaire Vuong – who owns the fortune of 9.1 billion USD according to Bloomberg statistics does not seem to flinch.

Talking to reporters, Vuong shared that Vinfast will not be profitable for at least another 5 years and that the local market is “too small” so overseas sales will be an important key to help the company. profitable. Mr. Vuong directly owns 26% of Vingroup. Vietnam Investment Group – a company in which Vuong owns a 92% stake currently holds a 31.6% stake in Vingroup.

Vinfast will have to complete the hard work to win over American consumers and other developed markets where emissions and environment standards are very strict.

In addition to these challenges, being able to successfully produce and sell electric cars is also very difficult. Many Chinese startups – backed by “billion-dollar” companies with billions of dollars worth betting on the potential in China – the world’s largest electric vehicle market, but very few of them make money.

BAIC BluePark – China’s largest electric car manufacturer has just forecast losses in 2019. Another company, NIO, is also unprofitable, they have listed on the New York Stock Exchange and are struggling and worried. that it will run out of money amidst the decline in demand for electric cars.

Vinfast’s first electric car will not be assembled until the end of next year, but Vuong affirmed that the company’s plan would be to export these cars to the US, Europe and Russia by 2021.

Vinfast clearly has many “difficult” obstacles when competing outside Vietnam, according to Michael Dunne – CEO of consulting firm ZoZo Go. “Before the company is ready to compete in the US – the toughest market in the world, they need to build a solid name.”

Many consumers prefer the old cars of Honda or Toyota rather than new and unknown names. Vinfast will need to produce at least 100,000 vehicles a year to compete, develop a global brand and establish a network from parts to services. Still, Vinfast has the opportunity to capture smaller markets in Southeast Asia.

Vinfast currently owns a 335-hectare factory in Hai Phong. The first cars on the assembly line were sold at a cheaper price than the production cost. 5-door hatchback retail at $ 17,000 while the sedan is $ 47,400 and the SUV is $ 60,400. The company aims to produce 500,000 cars a year by 2025. They are also producing electric scooters.

According to Vuong, in the next few years, Vingroup will have to spend “many trillion dongs a year” to make up for Vinfast’s loss, estimated at VND 18,000 billion (equivalent to USD 777 million) per year. Losses will include depreciation and net loss of about 7 trillion dong a year because selling cars is cheaper than cost.

Vingroup’s plan is to sell off some shares in support of Vinfast. In addition, they also forced the remaining branches to cut costs to support this goal. Vinfast will also seek new loans, adding to the existing US $ 1.95 billion debt. Vuong also plans to list Vinfast on Vietnam’s stock exchanges and possibly internationally.

“We have the ambition to build a world-class Vietnamese brand. Our biggest challenge is that Vietnamese products do not have a global brand. With many international friends, Vietnam still has “We will have to find a way to penetrate the market, prove our product presence and bring Vietnam to the highest standards of the world.”

According to Young Intellectuals / Bloomberg