So how do you go from selling dried fruit to real estate to manufacturing cars? Being the biggest conglomerate in Vietnam helps. The Vingroup was established in Ukraine in 1993 by a Vietnamese ex-pat. The company has now become Vietnam’s corporate juggernaut. From dried fruit to electronics the Vingroup has many toes in many pies, enough to have a go at manufacturing cars.
With Vietnam’s low wage economy starting a car manufacturer from scratch is still going to be a tall order. Vinfast currently reassembles cars in what is known as “kit form production”. Imported cars are slapped with high import taxes.
For example between 2003 and 2006 sales taxes on Toyota and Isuzu cars were increased from 5% to 50%. Very obviously this slowed car sales dramatically within Vietnam.
Vietnam is a one-party communist state, however, it is now considered a middle-income country. Which is economic speak for a growing middle-class.
That’s where Vinfast comes into play. By making cars inside Vietnam Vinfast would have an instant monopoly due to growing consumer demand.
One year ago Vinfast didn’t exist, if in name only. Today the company is readying a $3.5bn factory. It has employed former European car executives to lead the manufacturing and production setup.
Vinfast has appointed ItalDesign Giugiaro to design the prototypes and Pininfarina was handed the job of scaling future production.
The Austrian company, Magna Steyr, which is an automotive contract manufacturer is charged with developing the production capabilities.
Vinfast intends to build cars for the Vietnam market with up to date production standards. At the 2018 Paris Motorshow, the company revealed the LUX A2.0 saloon and LUX SA2.0 Crossover.
But the real star of the show was Vinfast’s celebrity ambassador. Sir David Beckham.
Sir David Beckham is a retired professional Premier League footballer. In a career spanning 20 years, he is regarded as one of the greatest players of his era.
Beckham’s star celebrity is a goldmine for companies wishing to spotlight their brands. Beckham has managed to turn this demand into a $350 million dollar brand.
A dead-ball specialist, Beckham’s natural ability was often overshadowed by his life outside football, be it his latest hairstyle or THAT altercation with Sir Alex Ferguson.
As part of the so-called golden generation of footballers, Sir David Beckham captained England 59 times. As a player, he won 19 major trophies in a glittering and highly rewarded career.
(It’s a slow news day people.)