This year, billionaire Pham Nhat Vuong has twice officially pledged to sponsor VinFast until “there is no more money”. Once was at Vingroup’s shareholders’ meeting in April and once in an interview with Bloomberg in June when VinFast turned 5 years old. “VinFast is Vingroup’s mission, honor and future, so we will never let it go,” Mr. Vuong affirmed.
As we were writing this article, many newspapers reported that billionaire Pham Nhat Vuong had sponsored VinFast with more than VND 3,300 billion in the first 6 months of 2024. Previously, in early 2023, Mr. Vuong donated VinFast 1 billion USD, equivalent to VND 25,000 billion, Vingroup sponsored a non-refundable amount of USD 500 million and lent 1 billion USD over a period of 5 years. By the end of 2023, Chairman Pham Nhat Vuong continued to donate a battery manufacturing company with a capital scale of VND 6,500 billion...
At present, Mr. Pham Nhat Vuong is the richest person in Vietnam with assets of 4.4 billion USD according to Forbes Magazine (USA). Looking at the "correlation" of giving, the loss of VinFast and his assets, no one can doubt the dedication of the head of the private corporation that pays the most taxes in Vietnam in 2024.
But skepticism about Vietnamese-made cars is still present, even among those who drive billionaire Pham Nhat Vuong’s electric cars every day. Have you ever wondered why many people do not have enough faith that Vietnam can produce cars? Why are cars both an aspiration and a cold shoulder for many of us?
To find the answer, let's go back to the history of the domestic automobile industry. Going back in time, if we count from the French brand cars imported to Vietnam in the early 20th century until now, it has been more than 100 years. And counting from the first car designed and manufactured by Vietnamese people in the North in 1958, it has been nearly 70 years. According to documents, in the first years of peace in the North, the demand for transportation increased. Therefore, in 1958, Chien Thang factory (Hanoi) decided to produce a small car. The task was assigned to Colonel, engineer Ho Manh Khang, Director of factory Z157 - Department of Motorcycle Management, and Mr. Vu Van Don, Director of the Department of Vehicle Management, to directly direct. On December 21, 1958, the "Chien Thang" car with license plate number QS 0001 left the factory. This was the first 4-seater car produced by Vietnamese people with an “appearance” no less than the Soviet Moskvitch at that time. President Ho Chi Minh came to see and encouraged: “We have produced cars. From now on, we need to research and produce transport vehicles to serve the country”. When asked to receive the car, President Ho Chi Minh refused: “Thank you for your concern for me and giving me this car. But now, I already have a car to drive. So you guys help me give this car to the wounded soldiers. They need a new and better car like this more than me”.
On National Day in 1959, the Victory car made by the army was included in the parade at Ba Dinh Square. However, in the following years, due to difficult war conditions and lack of budget, the Victory car was not mass produced.
After many ups and downs, nearly 40 years later, in 2004, only two enterprises, Xuan Kien Automobile Joint Stock Company (Vinaxuki) and Truong Hai Automobile Company (Thaco), were licensed to manufacture and assemble automobiles in Vietnam. In the early stages, both companies formed joint ventures to assemble commercial vehicles of foreign brands. But later, only Thaco remained loyal to this direction and achieved many successes with Mazda, Kia, Peugeot, BMW, Mini, while Vinaxuki was still determined to pursue the dream of "made in Vietnam" cars. At the 2012 Vietnam Auto Show, Vinaxuki displayed the VG small-sized urban car with 3 engine versions, prices, warranty policies, etc. The dream of Vietnamese cars was restarted, carrying with it many expectations of the people in the country. Unfortunately, everything stopped at display, no car had time to roll on the road. After a period of strong investment from 2006 to 2009, Vinaxuki faced a crisis and was asked to sell its factory to pay off debts. By 2015, the company was dissolved. The Vietnamese dream of owning a car officially ended.
Compared to other countries in the Southeast Asian region, the Vietnamese automobile industry started quite late. Therefore, the Government aims to focus on leveraging technology from foreign partners to develop domestic supporting infrastructure. Through that, gradually increase the localization rate and build the automobile industry according to that roadmap. To put it simply, a car has about 30,000 components and of course, no country or territory can produce all of these parts and components. But the country with a high localization rate, producing the most parts and components will have a developed automobile industry. A high localization rate also helps reduce production costs, making it more competitive than imported cars. This means that domestic consumers can buy cars at cheaper prices. In Vietnam, when participating, joint ventures commit to gradually increasing the localization rate of automobiles in each stage, but the implementation results are very modest. According to statistics, the localization rate of Vietnamese automobiles is currently around 20% on average, while in Thailand it is around 60%, even up to 80%. The localization rate of Indonesia is also around 50-60%, in China it is around 60-70%…
It is worth mentioning that despite the modest results, for businesses to have the opportunity to develop, over the past decades, cars have had to bear many types of taxes and fees. Up to now, a car in Vietnam must pay import tax for components (10-30%) or the whole car (from 50 to 70%) depending on the type, and depending on the import origin. Next is the special consumption tax of 40-60% depending on the capacity. VAT is 10%, corporate income tax is 22%. If you buy an imported car, you will have to pay an additional import tax of 50%.
Not only that, cars on the road are also subject to a registration fee of 10% or 15% depending on the locality. In addition, there are inspection fees, license plate fees, technical safety fees, etc. Even road maintenance fees must be paid twice, collected through the vehicle and collected through the BOT station, not to mention a series of other fees such as civil liability insurance fees, gasoline fees, and fees for the stabilization fund. Most recently, the Ministry of Finance has calculated an emission testing fee, etc. As a result, the price of cars to users has doubled or tripled depending on the type.
That is the biggest reason why even those who once hoped and dreamed of a car made in Vietnam want to untie this industry. At least they can buy imported cars at a cheaper price.
The dream of a “made in Vietnam” car seemed to have died out, but 5 years ago, the VinFast factory was established in Hai Phong, rekindling the desire for a Vietnamese brand car.
In 2018, in an interview with Thanh Nien Newspaper, billionaire Pham Nhat Vuong talked about the reason for investing in cars as follows: “I come from a manufacturing background, so I always want to find something to produce. At first, I planned to invest in confectionery, food, beer, wine and soft drinks, but if I made these products, I would have no chance of building an international brand. For example, beer is still far from being equal to Heineken, Carlsberg, etc., confectionery is even further away. Meanwhile, the electric vehicle revolution that has only been going on for 9 years and is expected to explode has “redrawn” the map of the automobile industry. But if we redraw it, how are we different from other companies?”. As Mr. Vuong predicted, electric vehicles have exploded and more importantly, on the redrawn map of the world’s automobile industry, VinFast has put its name on it in the most dignified way.
As we write this article, billionaire Pham Nhat Vuong is causing a stir in the market by pioneering the implementation of the franchise charging station model in Vietnam, opening up a potential new business sector and promoting the country's green transformation. Currently, with 150,000 charging stations of VinFast, Vietnam has become one of the countries with the leading number of charging ports in the region as well as the world, surpassing both the US and China.
Looking back after only 5 years of establishment, Vietnamese branded cars have been rolling out in the US, Europe, India, Indonesia, the Philippines; VinFast automobile factories have been started in many countries. With Xanh SM, Vietnam has become the first country in the world to export transportation services, in addition to successfully regaining the technology-based ride-hailing market that had fallen into the hands of foreign applications for more than a decade. Of course, it is impossible to miss the important milestone, the inspiration for the domestic business community when VinFast became the first Vietnamese enterprise listed on the US stock exchange.
VinFast breaks ground on $200 million electric vehicle assembly plant in Indonesia in July 2024. VF
More than just a dream, billionaire Pham Nhat Vuong has rewritten the domestic auto industry in the most brilliant and crazy way.
Crazy in the way he faces the storms in the market. Sharing in an interview with Bloomberg at Vingroup headquarters in Hanoi a few months ago, billionaire Pham Nhat Vuong said he starts a new day by playing with his grandchildren and sleeps 8 hours every night without worrying about anything. Bloomberg commented that despite pouring 2 billion USD into VinFast - a risky electric car startup, billionaire Pham Nhat Vuong still seems "unusually calm".
I have witnessed billionaire Pham Nhat Vuong being "unusually calm" like that more than once. That was the time at the end of 2022, the beginning of 2023 when the economy fell into a difficult bottom. In Vietnam, a series of domestic projects had to be transferred to foreign investors; many large enterprises were at risk of bankruptcy. There were businessmen who woke up one night and became debtors, many of whom fell into legal trouble. The market was abuzz with information that Vingroup also had to sell off projects to raise money to support VinFast. In a rare phone call, I exclaimed to Mr. Pham Nhat Vuong: "If I hadn't invested in cars, I wouldn't be so tired now." He calmly replied: "If it were easy, it wouldn't be my turn, but if I found it difficult and gave up, who would do it? So just keep fighting, my dear." Many people have witnessed that calmness at Vingroup's annual shareholders' meetings, the rare occasions when Mr. Vuong appeared. No matter how hot it is outside or how tense it is inside, Mr. Pham Nhat Vuong, the chairman of the meeting, still has only one familiar style: decisive, straightforward, does not avoid any questions and answers immediately after being asked.
There was only one time I felt the joy and pride of billionaire Pham Nhat Vuong on the other end of the line. That was when I witnessed the image of the VinFast convertible command car fleet at the 70th anniversary of the Dien Bien Phu Victory. I, the person who bought the first gasoline-powered VinFast and am using it until now, texted billionaire Pham Nhat Vuong with the feelings of a son of Vietnam. He revealed that those cars were made in a short time. A few months earlier, when answering shareholders, Mr. Vuong also affirmed that he and Vingroup would put all their efforts into VinFast. “Like 70 years ago when carrying out the historic Dien Bien Phu campaign, we had the slogan “All for the frontline, all for victory”, VinFast is the same. We will never give up on VinFast, this is not just a business story”.
I remember the moment of the VinFast convertible cars at the 70th anniversary of the Dien Bien Phu Victory, like a thread connecting history and the present. A symbol of the transformation from a resilient, indomitable Vietnam to a modern, globally integrated Vietnam.
Impressive and emotional!
Thanhnien.vn
Source: https://thanhnien.vn/ti-phu-pham-nhat-vuong-nguoi-bien-giac-mong-dien-ro-thanh-su-that-185241014094245436.htm
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