VinFast: The future of Vietnam’s largest conglomerate

Pham Nhat Vuong on June 12. Photographer: Linh Pham/Bloomberg

By prioritizing long-term success over short-term gains, Vietnam’s richest man, through VinFast, demonstrates his dedication to building a sustainable future. This commitment allows them to take a long view and address challenges in the electric vehicle industry, contributing to a better tomorrow.

Vingroup, the highest-ranked Vietnamese private company on the Fortune Southeast Asia 500 (No. 45), is setting its sights on becoming a regional conglomerate spanning tech, trade and services, and social enterprise. But the company’s chairman has made it clear that its future lies with VinFast, one of the world’s few pure electric carmakers. Although a young player in the car industry, VinFast is backed by Vingroup’s strong financial resources.

In a rare interview with Bloomberg, Pham Nhat Vuong, the CEO of VinFast and Chairman of Vingroup offered a surprising response when asked about how long he would continue to financially support the electric vehicle maker. “Until I run out of money,” Mr. Vuong said at Vingroup’s Hanoi headquarters. 

“A Devotion Project”

Mr. Vuong’s response diverges from the typical focus on short-term profits often associated with business leaders. Instead, his comment suggests a deep commitment to VinFast’s long-term vision, potentially enabling the company to weather the current hurdles facing the electric vehicle industry.

Reinforcing this long-term focus, Mr. Vuong prioritizes stock prices reflecting a company’s intrinsic and future worth. This is evident in his willingness to forgo short-term gains by holding off on additional share offerings. He believes the size of publicly traded shares (free float) holds little significance for major, long-term investors.

“We don’t care about the current price of the stock at the moment and we are not in a rush to bring more shares to the market,” Mr. Vuong said. “The free float doesn’t affect big and long-term investors.”

Mr. Vuong’s vision for VinFast extends beyond mere business considerations. Bloomberg quoted him describing the project as a “devotion project,” underscoring his personal commitment.

A famously private figure, Mr. Vuong is widely considered Vietnam’s most powerful business leader. His Vingroup conglomerate reigns supreme in the country’s real estate market, with its vast network of consumer goods, property development, shopping malls, and educational institutions impacting the lives of countless Vietnamese.

A driving force behind VinFast’s development is Mr. Vuong’s ambition to elevate Vietnam’s manufacturing sector beyond its current role of assembling electronics and footwear for foreign corporations.

In just over six years, VinFast has established itself as a leading Vietnamese auto brand and is making significant strides in the global market. Notably, VinFast stands as one of the few electric car companies worldwide to have built a comprehensive green ecosystem in such a short time. This ecosystem encompasses a full spectrum of electric vehicles – cars, motorbikes, bicycles, and buses – coupled with a robust network of charging stations and customer service infrastructure.

Achieving what many view as a “miracle” is no easy feat. However, VinFast’s core strength lies in its unwavering determination and ambition. Mr. Vuong has consistently emphasized that VinFast transcends mere business pursuits. The company embodies the aspirations of the Vingroup team to establish a Vietnamese high-tech industrial brand with global influence. This, in turn, aims to elevate Vietnam’s image on the world stage, showcasing its dynamism, modernity, and growing prosperity.

This commitment to societal impact grants Mr. Vuong a sense of composure amidst the current challenges facing the electric vehicle industry. As Bloomberg noted, for someone who has committed $2 billion to a Vietnamese electric-vehicle startup, “Pham Nhat Vuong appears unexpectedly serene.”

“Unexpectedly Serene”

Despite recent stumbles and the struggles of other global automotive brands, Mr. Vuong, with a net worth estimated at $5.3 billion, exudes confidence in VinFast’s ability to thrive. While the project is driven by a societal purpose, Mr. Vuong also maintains his belief in VinFast’s eventual financial self-sufficiency.

In the interview with Bloomberg, Mr. Vuong, clad in a blue suit and red tie, sat before a vast mural depicting a mystical mountain range. His demeanor conveyed an unwavering resolve in the face of challenges. He described his routine, highlighting his nightly eight hours of sleep, undisturbed by anxieties.

“VinFast will reach break-even point soon and be able to stand on its own feet,” he said. This tranquil mindset allows him to embrace a long-term perspective, undeterred by short-term hurdles as he has placed his firm belief in the future of electric vehicles.

While established automakers are hitting the brakes on expansion or delaying battery plant construction, VinFast is charting a different course. 

Some auto brands appear to be placing hold on their billion-investment sprees, mirroring similar cautious moves by competitors who have delayed the opening of EV assembly plants or are reportedly reevaluating its expansion plans.

Meanwhile, Mr. Vuong remains bullish on the future of electric vehicles. 

During the interview, Mr. Vuong also outlined VinFast’s ambitious plans. The company expects to open its Indian factory six months ahead of schedule, in the first half of next year. Construction on a new Indonesian plant is also slated to begin within the next two months.

“I’m not worried about electric vehicle sales,” he said. “The growth of electric vehicles will be inevitable.”

In the first quarter of 2024, VinFast continued to closely follow its global growth roadmap by launching its brand in Thailand and Indonesia, establishing a presence in the Middle East, beginning construction of its manufacturing facility in India, and ramping up its sales network globally. 

While domestic sales still drove most of the revenues this quarter, VinFast recorded encouraging growth in the U.S. market, with several new dealers reporting sales figures.

By pressing forward while others hesitate, VinFast has the chance to establish a significant advantage for future growth.