International auto shows often serve as coming-out parties for fledgling automakers, and this year’s Paris Motor Show hosted the debut of VinFast, Vietnam’s “first volume car manufacturer,” as the company calls itself in a release. Normally we’d find the word “volume” highly suspect coming from a brand new company that has yet to produce a single car, but VinFast might have the resources to actually deliver on some of its ambitious plans.
Though it’s new to the automotive game, VinFast is by no means a startup. The company is a subsidiary of Vingroup, Vietnam’s largest privately held business that posted revenues of $3.9 billion in 2017. The parent company mostly deals in real estate development, operating hundreds of properties in Vietnam including shopping malls, schools, and even amusement parks.
That helps put some weight behind VinFast’s plans to build a 36.1 million square-foot production facility. The company says building the plant will be one of Vietnam’s largest industrial projects to date. VinFast will initially invest $3.5 billion in the manufacturing complex, which can support a production volume of 250,000 units a year, it claims.
But what vehicles will that factory churn out? In Paris, VinFast showed off two of its planned models: a midsize sport sedan and an SUV. The names aren’t catchy, with the sedan badged LUX A2.0 and the SUV LUX SA2.0, but the designs aren’t bad.
That’s because VinFast commissioned sketches from famed design houses Pininfarina, Italdesign Giugiaro, Torino Design, and Zagato, then let the Vietnamese people vote on the designs they liked best. The winning sketches both came from Giugiaro, but weirdly the task fell to Pininfarina to further develop the vehicles’ styling.
You might be thinking VinFast blew all of its development money on design, but you’d be wrong. The company says it’s working with “leading” engineering and supplier partners to “ensure its cars exhibit strong Vietnamese character married with Italian design sophistication and European advanced technologies and quality.”
One of those partners, according to Reuters, is BMW, which has reportedly licensed its previous-gen 5 Series and X5 platforms to VinFast for use in the LUX A2.0 and LUX SA2.0, respectively. BMW may have sold VinFast its leftovers, but with tuning and upgrades from car maker and engineering consultant Magna Steyr, the underpinnings might not feel as old as they are.
BMW also licensed its turbocharged 2.0-liter I-4 to VinFast, which will produce the engine in-house at its plant. The turbo 2.0-liter will be offered in two states of tune, including one making 174 hp and 221 lb-ft of torque, and another making 228 hp and 258 lb-ft. Both engines will be available in the sedan, while the SUV will only get the higher-output version. All engines come mated to a ZF-sourced eight-speed automatic transmission.
After it launches its first two models, VinFast plans to release a city car, battery electric car, and an electric bus. The company says all of those products are already in development. Earlier this year, General Motors and VinFast signed a licensing agreement for a new global small car that will be built at GM’s former Hanoi plant, which VinFast purchased. The car is said to go into production in 2019 and will be branded as a VinFast model.
With its plant’s proposed production capacity of a quarter million cars a year, VinFast clearly has ambitions beyond the Vietnamese market. Though it doesn’t say which markets specifically it’s looking into, the company is targeting 2020 for its first exports. We don’t see Vietnamese cars breaking into the U.S. market anytime soon, but VinFast may be eyeing Europe given that its cars have been designed to meet Euro 5 emissions standards and are being tested for Euro NCAP performance.
As the first Vietnamese automaker, VinFast can bank on buyers’ sense of patriotism and national pride in its home market. But if the company does eventually go international, it would lose that home team advantage and have to compete against established car brands with in-house-developed products. How will international customers respond to the Vietnamese newcomer’s take on European luxury? Only time will tell.