Electric carmaker VinFast made a splashy debut on the US stock market, boosting its market value to $85 billion after its first day of trading on the Nasdaq. That was much higher than the valuations of Ford or General Motors at the time.
However, VinFast will need to readjust its sales strategy as well as product pricing to continue to maintain this capitalization level.
Since announcing its overseas expansion plans, VinFast has considered using only its own showrooms, similar to Tesla’s approach. However, VinFast Global CEO Le Thi Thu Thuy said on August 15 that the company is changing its hybrid model to attract distributors and dealers in the US.
As of June, VinFast had opened 122 showrooms globally, mostly in the western United States. In addition to selling directly to customers, the automaker will work with dealers to open new points of sale in North America and other global markets.
“Opening our own store is great, but it takes a lot of time. Joining forces with other partners to move faster is always our choice,” Ms. Thuy affirmed.
“We are currently defining the terms of this new model and discussing with potential partners. Details will be announced in the near future,” Ms. Thuy shared.
VinFast Global CEO Le Thi Thu Thuy speaks at the Bell Ringing Ceremony to launch VFS shares on Nasdaq on August 15.
VinFast's idea has received positive feedback from some dealers in the US, but they want to know more details about VinFast's plans, including sales strategy, dealer requirements, the company's parts distribution plan and vehicle warranty.
Dealers in the U.S. say there are still too many unanswered questions, including how VinFast will distribute the parts needed for repairs.
“Dealers have to care about their brand. If I sell you a car and you can’t buy a fender from my store, you’re going to be upset. I’m not going to do that,” said Scott Fink, CEO of Fink Automotive Group, a company that owns VW and Subaru dealerships near Tampa, Florida.
While Tesla may be able to establish itself as the world’s leading electric carmaker, other startups have struggled to get off the ground, dealers said. VinFast will have to compete with established brands such as GM, Ford and Hyundai.
Some dealers said VinFast may have to offer attractive profit margins to dealers to offset the risk. In addition, the car company needs to provide a reputable warranty to gain customers’ trust.
According to dealers, the lack of a name is not a factor hindering VinFast's business, because brands like Toyota, Honda and Hyundai all started on a small scale and gradually developed successfully.
“If it's a good product and has a good warranty, Americans will buy it,” said Rhett Ricart, CEO of Ricart Automotive Group in Columbus, Ohio .
Nguyen Tuyet (According to Reuters, Asia Financial)
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