19 ms·
Vietnam’s Richest Man Bets $2B to Sell Cars to Americans
- neonate 7y agohttps://outline.com/https://www.bloomberg.com/news/articles/2019-12-09/vietnam-s-richest-man-bets-2-billion-to-sell-cars-to-americans https://outline.com/https://www.bloomberg.com/news/articles/...
- quantumfoam 7y agoTell me, which kind of cars or manufacture would we like to give you money for? Fuck off.
- tabtab 7y agoHe has one advantage that past failed attempts didn't: electric cars are relatively simple compared to combustion engine cars. But American consumers will want to see roughly 5 years of reliable quality reviews before they trust the brand. Problems with Yugos and early Hyundai's left a trail of memorable Internet memes. So, what do you do the first 4 years? That's a lot of years to take a loss in order to gain market share. Maybe start in the rental markets by loaning the cars out to rental shops. If they are loaned on a short-term basis, then the rental shops won't have to eat quality problems, if they appear. One thing they have to know: if you foul up quality early, it takes a long time to recover that reputation. Detroit brands are still recovering from the clunkers they made in the 70's and 80's. They are now on par with the Japanese brands, but that's not good enough to get a clean reputation. Hyundai had to include generous extended warranties AND low prices to restore their reputation and market share.
- lostapathy 7y agoDecent idea but wrong description. Hyundai and Yugo has problems decades before “internet memes” were a thing.
- tabtab 7y agoYes, but they were among the very first things meme-ified on the Internet. Pent up anger?
- mmanfrin 7y agoI've never seen a Hyundai meme.
- freehunter 7y agoMeme as in image macro with top and bottom text? I haven't either, but that's not what the word "meme" has meant until very recently. Meme as in "Hyundai/Yugo are terrible cars" repeated even by people who have never driven one? Very common back in the day before meme meant image macro. FORD = Found On Road Dead (or Fix Or Repair Daily) FIAT = Fix It Again Tony JEEP = Just Empty Every Pocket HYUNDAI = Hope You Understand Nothings Drivable And Inexpensive An article from 2001 saying this Hyundai joke is now outdated because they finally make good cars: http://content.time.com/time/magazine/article/0,9171,1000326,00.html http://content.time.com/time/magazine/article/0,9171,1000326...
- tabtab 7y agoThey generally were jokes, some with images, some not. It seems every joke site at the time had at least one about Yugo's or Hyundai's. At least that's what I remember. This is roughly between 1995 and 2000. Some may have been on Compuserve instead of the Internet, I don't remember the details, but generally both copied each other.
- yellowapple 7y agoIn the same vein, my grandpa considered Toyotas to be "toys" ("they've even got 'toy' in the name) until he bought a Highlander and - eventually - a Prius.
- WalterBright 7y ago> FORD = Found On Road Dead (or Fix Or Repair Daily) Haha, just fixed my Ford in the driveway today! (Battery cable corroded to the point it wouldn't conduct anymore.) But the beast is 30 years old, so I forgive it.
- fnord77 7y ago> electric cars are relatively simple compared to combustion engine cars. It's not really an advantage, though. Established makers have that same advantage, with the addition of having established dealer and service networks, established reputation, and so on. He's about 10 years late to the EV party
- blhack 7y agoBuy up a few parking lots in a few major metros and let people unlock the cars with an app on their phones as short term rentals. The vehicles will probably end up as a loss, but it's going to get a lot of press. Then start selling them. Make the parking lots into car dealerships. Put them in college towns where people are just starting to get real jobs and have money to spend, and are also very online.
- scythe 7y agoThis is clever, but I think you could get a similar result with fewer dedicated internal staff (better for a company with no US ops) by leasing or selling vehicles to e.g. ZipCar.
- blhack 7y agoZip car is essentially what I mean. Just adding the additional press bump by trying to draw a comparison to the scooter shares, or docked bicycles.
- tabtab 7y agoDo you mean sell the cars to students? It's same problem: they will probably prefer very used cars from known brands over slightly used cars from an unknown brand.
- standardUser 7y ago"American consumers will want to see roughly 5 years of reliable quality" You say that as if it's gospel, but it sounds like "boomer thinking" to me. The demand for electric cars over the next ten years will mostly come form people who have different ways of making purchasing decisions than in decades past. And they've never heard of a Yugo.
- dahdum 7y agoI don’t think researching a $40k purchase and valuing reliability is “boomer thinking”. It’s a side effect of people getting married, buying homes, and starting families.
- caspper69 7y agoYeah, lol. It's called adult thinking. And it happens once you actually become one. One that is responsible for others, not just yourself and your whims. "Adulting" for an hour a week to pay your bills doesn't count.
- kube-system 7y agoThe average age of a new car buyer in the US is 53 years old, so maybe you're on to something...
- Igelau 7y agoThat might have been true once, but I suspect this small-sample history is now irrelevant due to shifting demographics. Only Boomers remember the Yugo. The rest of us are too busy trying to afford the privilege of commuting to really care where the car came from.
- cgriswald 7y agoWhat a bizarre sentiment. If you can barely afford it you should care more. Get a reliable make and model that there are a lot of so the parts are cheap. Also, I’m not a Boomer and I remember Yugos.
- mattkrause 7y agoThe only thing I know about the Yugo is that it was awful.
- Igelau 7y agoYou're confused. The topic was generational bias over country of origin, not reliability.
- cgriswald 7y agoThe actual topic is reliability. Country-of-origin is a consideration in reliability. You can't just exclude the context of the original post. You're trying to argue that "Boomers", which I took in good faith that you were not using as an epithet, are the only ones who would consider country-of-origin. That's, simply put, wrong.
- Symbiote 7y ago> Only Boomers Why is this term suddenly popular, especially here? I'm downvoting comments using it, since it seems to be disparaging at best, if not offensive. It's also used inaccurately. The Yugo wasn't even produced until 1980.
- gambiting 7y ago
- zyang 7y agoDetroit never stopped churning out clunkers. My neighbors brand new, $50k Chevy truck’s electrical is completely shot after first year. This is in mild Northern California weather.
- nradov 7y agoChevrolet ranks 25th in reliability out of 30 mass market vehicle brands. https://www.usatoday.com/story/money/cars/2019/11/14/consumer-reports-auto-reliability-study-2020-vehicles/2578463001/ https://www.usatoday.com/story/money/cars/2019/11/14/consume...
- radiorental 7y agoIt so bad, it's a running joke [1] I think low-end Fords (i.e. simple) are the only US car I'd consider and even then, their transmissions are suspect. [1] https://www.youtube.com/watch?v=zSBsq6HBBzw https://www.youtube.com/watch?v=zSBsq6HBBzw
- blaser-waffle 7y agoWhole reason I bought a Ford Fiesta with a stick is because I heard that their transmissions are made out of glass. Otherwise, decent car.
- rwmurrayVT 7y agoA FiST though :)))
- Cougher 7y agoGiven the angle of the original Consumer Reports study that the USA Today article is about, it wouldn't appear as simple as your comment suggests.
- o-__-o 7y agoAnd here my 4 year old $20k ford is still worth $12k, so maybe not all of Detroit is bad?
- AnthonyMouse 7y ago> So, what do you do the first 4 years? That's a lot of years to take a loss in order to gain market share. Hyundai addressed this by offering a ten year warranty. They could do that right out of the gate rather than waiting until they have a bad reputation first. Another possibility is to start off with a big leasing program. People aren't too concerned about repair costs or resale values for leased vehicles.
- honestoHeminway 7y agoJust add a waranty and suddenly.. that doesent matter. Also new product category- i wouldnt trust a traditional carmaker to make a good e-car.
- hamhand 7y agoIt's simple to make one that moves, but hard to make it superior to other brands.
- llampx 7y ago> it takes a long time to recover that reputation. Detroit brands are still recovering from the clunkers they made in the 70's and 80's. I would say that they are still recovering from the clunkers they made in the 2000s. Detroit never really got into the quality mindset that the Japanese car makers became famous for. And they didn't get into the driving dynamics mindset of their European counterparts, except maybe a couple of Cadillac models starting with the CTS-V.
- rasz 7y agoYou can always tell you're in a >5 year old Dodge by the cracked dashboard, over 30 years of same never solved issue :o
- rdtwo 7y agoNever really recovered, did you see the recent article on the coverup over fiesta and focus transmissions at ford. Shit like this is why I don’t buy “American” (Mexican) cars
- juanbyrge 7y agoCurrently EVs are not remotely price competitive with ICE cars. You can get a decent new ICE car for $15-20k. But even entry level EVs seem to be $35k+. Until new EVs reach the $20k price point, I do not anticipate them going mainstream. Perhaps a new entrant like VinFast will achieve this.
- toomuchtodo 7y agoAverage price of a new car in the US is ~$36,718. Some consumers are taking on 6,7,8 year auto loans to pay $50k-$80k for vehicles. It is not necessary for EVs to reach the price point you mention for adoption to take off, considering much lower fuel costs (total cost ownership). I know someone putting almost 2500 miles/month on their Model S commuting. The math worked out immediately for them to dump their Chevy SUV.
- kevin_thibedeau 7y agoThe math already worked out for them to get a Camry. One without a massive powertrain component replacement looming after 10 years.
- VWWHFSfQ 7y agobut they didn't want a camry. they wanted a tesla so that's what they got
- toomuchtodo 7y agoYeah, they also wanted a status symbol, so win win.
- sosborn 7y agoWhy do we assume that they wanted a status symbol?
- 7y ago
- beaconstudios 7y agoVietnamese billionaire? I thought Vietnam was a communist country?
- jammygit 7y agoI’m a little curious about how that works
- saagarjha 7y agoI’m sure you can take a look at China for examples.
- freehunter 7y agoReally it comes down to Big-C "Communist" vs little-c "communist". Soviet Russia was little-c "communist" in that you weren't allowed to make much money and if you made a lot you weren't allowed to spend it, so everyone had exactly the same things and quality of things. More modern "communist" countries are Big-C Communist, more correctly titled Capitalist Authoritarianism. You can have as much of anything as you want, as long as you're loyal to the government and agree that the government can take everything you own any time they want. Including your business or your billions of dollars. China has hundreds of billionaires even though they're "Communist" because they're not actually communist, they're Authoritarian Capitalist.
- javagram 7y agohttps://en.wikipedia.org/wiki/Economy_of_Vietnam https://en.wikipedia.org/wiki/Economy_of_Vietnam “Since the mid-1980s, through the Doi Moi reform period Vietnam has made a shift from a highly centralized command economy to a mixed economy that uses both directive and indicative planning through five-year plans.”
- HNLurker2 7y agoJust like Romania? Or Cuba?
- lazylizard 7y agoWhat differentiates 1 electric car manufacturer from another? Superior driving dynamics? Superior ride? Superior batteries? Superior motors?
- i_feel_great 7y agoSuperior marketing
- Koshkin 7y agoMeh, everyone knows how to do marketing. But differentiation itself is an important part of successful marketing in a crowded market. So the better answer may be, brands differentiate themselves in exterior and interior design and not much else.
- ryanhuff 7y agoSafety, reliability, service, fit and finish, range.
- javagram 7y agoAll of the above? Plus a lot of other things like styling, interior, infotainment, soundscape and sound dampening, dealership/repair network, and so on... There’s nothing magical about electric cars that takes away all the hard parts of building a car. Look at all the maintenance issues Teslas have with falcon wing doors and so on to see the potential issues that can turn customers away even on an electric car. Just because you have an electric motor instead of an engine doesn’t mean you don’t have all the other parts of a car to deal with and tweak.
- hadlock 7y agoElectric cars typically have 1% the moving parts of an internal combustion engine vehicle. If the chassis is built well, you just need to swap out the motor and battery as needed, and flush the coolant every 5 years. There's no belts, chains, pumps etc for the most part to maintain or replace. The model X is pretty complex but if you look at the model 3 it's just a bunch of plug and play parts like a PC.
- SQL2219 7y agoWow, this is a $2B mistake. Funny thing about very wealthy people, they think because they had success in one area that it will translate to success in another. Most likely their timing and luck were perfect early in their career. I don't think timing is on his side here.
- LeonM 7y agoThose are the exact same comments as people had on Tesla roughly 8 years back. There even was a whole website dedicated on the Tesla 'death clock', predicting when they would go bankrupt. Only time will tell.
- rdtwo 7y agoJury is still out in Tesla, I suspect they will still go BK at some point and that’s probably the best thing that could happen to the car imo. They could take the best stuff and shed some of the debt and musk issues
- huydotnet 7y agoThis guy is not an ordinary walthy people who think he can success in one area so he can translate it to another. He actually succeed in way a lot area before jumping to auto making. I can't predict the result of this move but I'd say, he not that type of wealthy people.
- 9nGQluzmnq3M 7y agoVingroup is a classic Asian conglomerate that is already varyingly successful in half a dozen fields ranging from retail to real estate and hospitals. The key challenge is whether they can make money outside their home market of Vietnam.
- xmly 7y agoFirst, it is good PR. Second, the Vietnam government probably subsidizes the company for exporting, even they just claim to do so.
- walrus01 7y agoEven if this fails spectacularly, if he really spends $2bn it could have an effect globally on increased demand/manufacturing, and lower prices in $ per kWh for good quality lithium ion batteries. I may be wrong on this, but as I recall, Vietnam's domestic auto industry exists because they have escalating high tariffs on foreign manufactured cars with certain engine sizes (eg: 35% tariff on foreign made 4 cyl 1.6 L, 40% or more on 2.4L and larger engines, 50% tariff on things with 3.5 to 5L engines). Similar to China.
- deleted 7y ago[deleted]
- latchkey 7y agoIt isn't just the size of the engine, but also type of car. When you get into the lambo territory, it is 300% markup. That said, there is so much insane wealth in Vietnam now, it doesn't matter. You see them all over Saigon. (I've lived in Vietnam going on 4 years now)
- fnord77 7y agoIf anything, it seems like there are already too many automakers. For various reason I believe FCA, Nissan, Mitsubishi and Ford are going to fail. I can't imagine any upstart without any compelling unfair advantage/killer product is going to fair well in an imploding auto market. If he started this endeavor 8-10 years ago, he'd have an advantage. Now nearly every car maker is either producing or on the verge of producing at least one EV model.
- dsprt4cultre 7y agoSwap Ford with GM and you're right on the money
- bilbo0s 7y agoI think you meant add GM. Of course, the US may sail in and prop those two up. Kind of a "Too political to fail" type thing. But on their own, absent help like that, yeah, I don't really see how they make it without some sort of market event. Failure, fire sale merger, etc.
- tabtab 7y agoThey are probably more likely to merge than outright fail, barring a bigger-than-normal recession.
- bilbo0s 7y ago>I can't imagine any upstart without any compelling unfair advantage/killer product is going to fair well Vietnam doesn't really care too much about WTO rules, so they provide not only enormous resources to their firms through the back door, but also slap enormous tariffs on foreign auto dealers at the front door. So yeah, what we may term unfair advantage, they call command capitalism.
- Igelau 7y agoThe timing could be better, but you have to understand, it's hard to find anything to do with massive wealth in Vietnam. You either start a car company or you blow it on black market Rhino horn for your hangovers.
- tim333 7y agoAt least the cars look quite good https://www.vinfast.vn/themes/custom/vinfast/static/images/home/thumbnail-3.png https://www.vinfast.vn/themes/custom/vinfast/static/images/h... There are 2.2 million+ Vietnamese Americans so maybe some of those will buy on principle.
- whoanow 7y agoUh do they?
- tim333 7y agoWell, eye of the beholder. I think they look ok.
- tabtab 7y agoThey look nice to me, but my wife always tells me my judgement on fashion is an outlier (said using less pleasant words).
- Igelau 7y agoEh, they look like every other car.
- cardiffspaceman 7y agoLike the next refresh of the Accord.
- ulfw 7y agoRight one looks a bit like an Alfa Romeo knock off to me. Not necessarily a bad thing ;)
- jmpman 7y agoThe Vietnamese Americans I know came during the end of the Vietnam war. I don’t see them supporting a car company from that communist country.
- xmly 7y ago1000 bucks. I will buy one
- romwell 7y agoWhat always blows my mind is that Vietnam's richest man got rich making noodles in Ukraine[1]. Mivina instant noodles were a staple food for me as a kid. It was a very Ukrainian brand to me. I was telling my Vietnamese friend about these glorious noodles, and she told me "You know that it literally means 'Noodles From Vietnam' in Vietnamese, right?". Turns out, Mivina is a brand of Phạm Nhật Vượng's, which grew out of his (not too successful) restaurant. He grew the Mivina business instead, and eventually sold it to Nestle for $150M - and then 10X'd that with a resort/real estate business in Vietnam. A pity he didn't stay in Kharkiv, I say. [1]https://en.wikipedia.org/wiki/Ph%E1%BA%A1m_Nh%E1%BA%ADt_V%C6%B0%E1%BB%A3ng https://en.wikipedia.org/wiki/Ph%E1%BA%A1m_Nh%E1%BA%ADt_V%C6...
- SenHeng 7y agoMoral of the story, know when to pivot.
- deleted 7y ago[deleted]
- threw4324 7y agoAmusingly, Nepal's (only?) billionaire also appears to have taken this route. https://www.wealthx.com/featured/2015/the-nepalese-billionaire-using-his-noodle-to-help-nepal/ https://www.wealthx.com/featured/2015/the-nepalese-billionai...
- bicolao 7y ago> You know that it literally means 'Noodles From Vietnam' It's short for (Mi) (Vi)et (Na)m, which is basically Vietnamese Noodles. You can already guess "Mi" is noodles in Vietnamese.
- albertshin 7y agoSamsung started off as a small trading store / company and later became a sugar refinery. Lotte (another Korean conglomerate) started off selling gum during wartime. Even Nike initially started off with Phil Knight simply being the importer for Japanese Onitsuka Tiger shoes. This is why I think it makes total sense for good early stage investors to invest in people and teams (as opposed to the ideas). The category or industry they're operating in today is just a small taste of what they're capable of.
- deleted 7y ago[deleted]
- dirtyid 7y agoSomewhat relevant: >Bayerische Rundfunk reports that Ocean Lotus (also known as APT32), a hacking group associated with the government of Vietnam, has been detected in the networks of BMW and Hyundai. Engadget calls it cyberespionage.
- mika9090 7y agoCommunism at its best.
- rdtwo 7y agoI got to wonder how well these guys understand the us market. Low end us consumer are so deep underwater in their old car that you would need to buy them out to even allow them to switch brands. I think if you are breaking into the car market at the low end you have to offer a total lifestyle package. Maybe a very long term lease with full maintenance program package or some other Mechanism that allows people that have no spare cash to continue operating a vehicle for a long time and build a reputation for reliability. That being said the low end is kind of a trap because you get stuck as a low end brand (Hyundai) and in the USA you need a dealer network but a low end dealer won’t be able to sell high end due to bad dealership environment.
- rasz 7y agoUS low end consumers lease 15 year old clunkers with GPS tracker from shadier one day late repossessing Buy here pay here outfits.
- anonguy5640 7y agoAs a Vietnamese, if you care about the performance of the car. Think twice, maybe more.