Vietnam’s richest man is spending US$2 billion to sell electric cars to Americans

Pham Nhat Vuong, the billionaire behind auto start-up VinFast, is following in the footsteps of Chinese carmakers who have yet to crack the US market

VinFast counts Toyota, Ford and Hyundai among its competitors and this year began selling cars with BMW-licensed engines

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Pham Nhat Vuong, Vietnam’s richest man, is now in charge of VinFast. Photo: AFP

Published: 8:00pm, 10 Dec 2019Updated: 12:06pm, 11 Dec 2019

The billionaire behind six-month-old Vietnamese auto start-up VinFast plans a feat even Toyota and Hyundai couldn’t pull off during their early days: sell a car in the US.

Pham Nhat Vuong, the Southeast Asian country’s richest man and now in charge of the new automaker, is so intent on exporting electric vehicles to the lucrative American market in 2021 that he’s ploughing as much as US$2 billion of his own fortune to reach that goal. His cash would account for half the capital investment of VinFast, which began delivering cars to Vietnamese consumers with BMW-licensed engines earlier this year and aims to expand into electric vehicles.

“Our ultimate goal is to create an international brand,” the 51-year-old tycoon said in an interview at the Hanoi headquarters of the car company’s parent Vingroup JSC, which Vuong founded and holds the title of chairman. “It will be a very difficult road and we will have to put in a lot of effort. But there’s only one road ahead.”

The home-grown cars made under Vuong’s sprawling real estate-to-hospitals conglomerate faces an uphill battle to succeed overseas: carmakers such as India’s Tata Motors and Malaysia’s Proton struggled to win over consumers away from their home turf. Even in Vietnam, VinFast has formidable competition from established foreign players such as Toyota, Ford and Hyundai.

VinFast follows a long list of Chinese carmakers that have also had ambitions to sell vehicles in the US going back more than a decade. Though the plans have yet to come to fruition, Guangzhou, Zotye and others have set up local sales units and research-and-development operations to show just how serious they are. Some Chinese brands have also exhibited at American auto shows in recent years.

The tycoon, whose net worth is US$9.1 billion, according to the Bloomberg Billionaires Index, is undaunted. He sold some of his shares in Vingroup last year and plans to sell as much as 10 per cent more to raise funds for the ambitious project. He owns 49 per cent of VinFast, while the parent, Vingroup, holds 51 per cent.

Cars at the assembly plant of VinFast, Vietnam’s first home-grown manufacturer. Photo: AFP

The automaker won’t be profitable for as many as five years, said Vuong, adding the local market is “too small” and overseas sales are key to becoming profitable. Vuong directly owns 26 per cent of Vingroup, according to Bloomberg data. Vietnam Investment Group JSC, in which Vuong has about a 92 per cent stake, holds 31.6 per cent of Vingroup.