Tiếng ViệtConsumers have been impressed by VinFast’s efforts, but this is just the first stage in the competitive automotive industry.
In early December 2017, Lamborghini launched the Urus globally at its factory in Bologna, Italy. The event began with a flag ceremony, where the Italian national flag was raised with great solemnity. At the end of the event, then-Prime Minister Paolo Gentiloni stood before the factory workers, repeatedly thanking the shareholders for agreeing to the brand new, and inherently risky, project. This was typically the role of the CEO, not the Prime Minister.
VinFast Fadil at its launch event.
 |
|---|
| Italian Prime Minister thanks Lamborghini shareholders at the Urus launch in Bologna, Italy, December 2017. Photo: Đức Huy |
The flag ceremony, national anthem, and Prime Minister’s presence imbued the Urus with a significance beyond a mere commercial product; it became a symbol of Italian pride. Supercars and fashion have made the Southern European country famous worldwide.
VinFast’s approach in Vietnam shares some similarities. The message of a “Vietnamese car brand” has been consistently promoted since the factory’s groundbreaking. “National pride always holds considerable power to win over domestic customers,” commented a senior manager at a Japanese car company. Hyundai previously achieved great success with this strategy. In South Korea, Hyundai and its subsidiary Kia hold a combined 80.5% of the car market, according to Statista. Hyundai possesses a strong foundation in mechanical engineering, crucial for automotive development, while VinFast is a completely new name in the industry, with no prior connection to heavy industry. The Lux A sedan and Lux SA SUV were the first two models developed, but they remain in the testing phase. The Fadil followed, with less fanfare, but reached customers first in June. This compact car will have at least three months alone to gather customer feedback before its larger siblings are delivered in Q3. Experts say three months is too short to fully understand a car, but sufficient to assess its performance, functionality, and the effectiveness of customer service, repairs, and maintenance provided by the manufacturer. Therefore, the Fadil serves as a litmus test to gauge two factors: how well VinFast delivers on its promises and how Vietnamese customers react to a product widely known before its release. The Fadil enjoys several advantages entering the market. A seasoned sales expert believes the Vietnamese automaker made a wise decision by releasing the Fadil before the Lux. | VinFast Fadil on display in Hanoi. |
|—|
| VinFast Fadil in Hanoi. |
The Fadil is essentially a rebadged Opel Karl Rock, the European version of the Chevrolet Spark. The Spark and Karl have already undergone the test of time for the Fadil. This significantly reduces the risks associated with the reliability and durability of a new model. Developing a completely new car would have cost more time and money, and customers would need several years to assess its durability and reliability. The Fadil competes in the A-segment, the second largest in the Vietnamese car market after the B-segment. In the first five months of 2019, over 12,600 A-segment cars and over 19,000 B-segment cars were sold. The strong purchasing power in this market segment provides a solid foundation for the VinFast model to gain traction. The expert further analyzes that, being in the compact car segment, the Fadil’s target audience is narrower than those of higher segments. The needs of small car users primarily revolve around compactness, ease of handling, and affordability in repairs and maintenance. This customer base doesn’t demand the same level of technology as those buying luxury cars. “Shortcomings in small cars can be addressed in larger cars, but the reverse is very difficult,” the expert notes. This explains VinFast’s efforts to create a positive image with larger vehicles. “Once you’ve successfully built high-end cars, producing smaller models becomes much easier. But the opposite approach often faces skepticism,” VinFast CEO James DeLuca once explained. Despite the existing platform, the Fadil still faces challenges as VinFast’s market entry vehicle in Vietnam. “Customers’ perception of the Fadil will influence their views of the Lux,” said a former director of a luxury car company. He explains that, although a compact car, the Fadil is manufactured in the same factory and distributed through the same channels as the two premium models. Therefore, factors related to build quality, materials, sales, and after-sales service will be consistent across the company’s products. Moreover, to foster customer loyalty and encourage upgrades, the Fadil needs to win over customers. If Fadil users are dissatisfied, it will be difficult to persuade them to choose a Lux when they want a larger car. Another challenge for the Fadil is its high price within its segment. The standard version is currently priced at 395 million VND, while the fully equipped version costs an additional 77 million VND, pushing the price to 472 million VND, nearly reaching B-segment territory. The best-selling car in the A-segment, the fully equipped i10, is priced at 405 million VND, the Morning at 390 million VND, and the Wigo at 402 million VND. VinFast plans to increase the price of the standard Fadil to 465 million VND by September 1st. Today (June 14th), VinFast inaugurated its factory, marking another milestone in the development of the Vietnamese car brand. Fadil vehicles rolling off the assembly line in Cat Hai Island will soon be registered and hit the streets, beginning their role as a “litmus test”. After its debut in -1°C weather in Bologna in late 2017, the super SUV wasn’t officially launched until July 2018. However, Urus sales in 2018 reached 1,761 units, accounting for 30.6% of the company’s total sales (5,750 vehicles). In 2020, Lamborghini plans to produce 8,000 cars, with 50% being the Urus. The car that former Prime Minister Paolo Gentiloni placed high hopes on is successfully promoting the Italian supercar industry globally. The Fadil doesn’t carry such a grand mission, as VinFast is still relatively new to the world stage. Many more models are yet to be launched. But for now, the path for the company’s products from the factory in Cat Hai to public roads is being paved by the Fadil.