
Vietnam’s Richest Man Bets $2B to Sell Cars to Americans - danso
https://www.bloomberg.com/news/articles/2019-12-09/vietnam-s-richest-man-bets-2-billion-to-sell-cars-to-americans
======
romwell
What 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...](https://en.wikipedia.org/wiki/Ph%E1%BA%A1m_Nh%E1%BA%ADt_V%C6%B0%E1%BB%A3ng)

~~~
SenHeng
Moral of the story, know when to pivot.

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tabtab
He 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.

~~~
zyang
Detroit 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
Chevrolet ranks 25th in reliability out of 30 mass market vehicle brands.

[https://www.usatoday.com/story/money/cars/2019/11/14/consume...](https://www.usatoday.com/story/money/cars/2019/11/14/consumer-
reports-auto-reliability-study-2020-vehicles/2578463001/)

~~~
radiorental
It 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
Whole 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
A FiST though :)))

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tim333
At least the cars look quite good
[https://www.vinfast.vn/themes/custom/vinfast/static/images/h...](https://www.vinfast.vn/themes/custom/vinfast/static/images/home/thumbnail-3.png)

There are 2.2 million+ Vietnamese Americans so maybe some of those will buy on
principle.

~~~
whoanow
Uh do they?

~~~
tim333
Well, eye of the beholder. I think they look ok.

~~~
tabtab
They look nice to me, but my wife always tells me my judgement on fashion is
an outlier (said using less pleasant words).

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walrus01
Even 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.

~~~
latchkey
It 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)

------
juanbyrge
Currently 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
Average 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.

~~~
walrus01
> Some consumers are taking on 6,7,8 year auto loans to pay $50k-$80k for
> vehicles

which is absolutely insane in my opinion, to have a shiny quickly depreciating
status symbol. the amount of interest paid over the life of a 72-84 month loan
is nuts. but people are short sighted and look at the monthly loan payment
amount only. dealerships of course know this, and start naive people off in
the negotiating with "how much do you want to pay a month?". they'll never
show an amortization table.

~~~
aianus
What's wrong with taking an 8 year loan for an asset that you will possess and
use every day of those 8 years? As long as the interest rate is good (less
than 4%, say) it sounds like a prudent decision that frees up cash flow.

~~~
WA
A car is not an asset, but a liability. It doesn't generate money, it costs
money.

If your 8-year-car is going to make you substantially more money than a cheap
car that maybe doesn't require you to take a loan, you have a point. But since
cars are about to go from A to B and the status symbol itself doesn't pay for
anything, a cheaper car would do.

~~~
nkrisc
Unless you consider the status utility worth paying for. Some people think it
is. I think they're wrong, but who am I to say how they spend their money?

Why do people by expensive clothes that are no better than clothes a fraction
of the cost?

~~~
toomuchtodo
There’s evidence that people make decisions about others based on their
clothing, even when directly informed not to during studies, so it appears
there might be some utility in more expensive clothing.

The appearance of status might beget more status.

[http://wws.princeton.edu/news-and-events/news/item/split-
sec...](http://wws.princeton.edu/news-and-events/news/item/split-second-
clothes-make-man-more-competent-eyes-others)

[https://news.ycombinator.com/item?id=21751445](https://news.ycombinator.com/item?id=21751445)

------
fnord77
If 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
Swap Ford with GM and you're right on the money

~~~
bilbo0s
I 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.

------
neonate
[https://outline.com/https://www.bloomberg.com/news/articles/...](https://outline.com/https://www.bloomberg.com/news/articles/2019-12-09/vietnam-
s-richest-man-bets-2-billion-to-sell-cars-to-americans)

------
dirtyid
Somewhat 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.

------
lazylizard
What differentiates 1 electric car manufacturer from another? Superior driving
dynamics? Superior ride? Superior batteries? Superior motors?

~~~
freehunter
What differentiates one ICE car manufacturer from another? Already they're
using the same basic engine design (and often the same engine) between brands.
With ICE cars it comes down to aesthetics, passenger features, and marketing.
No different than EV makers.

~~~
rdtwo
Interiors and reliability

------
rdtwo
I 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
US low end consumers lease 15 year old clunkers with GPS tracker from shadier
one day late repossessing Buy here pay here outfits.

------
anonguy5640
As a Vietnamese, if you care about the performance of the car. Think twice,
maybe more.

------
xmly
1000 bucks. I will buy one

------
beaconstudios
Vietnamese billionaire? I thought Vietnam was a communist country?

~~~
javagram
[https://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
Just like Romania? Or Cuba?

~~~
faraday2211
Romania has moved over from communism to a crime centric country - the culture
and everything is dominated by it, so the only “billionaires” are dodgy people
with a shady past. Went from communism to kleptocracy, rather than democracy.

~~~
HNLurker2
We have a new government, same German president, and most "powerful" politican
is in prison

~~~
faraday2211
I know, i am from the country. Came back after years of living abroad only to
find a big fat deception, a culture of crime and corruption, cheap
nationalism, conspiracy theories in every aspect of life, pseudo sciences,
incompetence at all levels and lame “pride”. Naturally there is a handful of
great people but too few to make a difference. I for one cant wait to get out
of here. Oh and that german president apparently has a criminal history of
buying properties illegally (he apparently lost a case in this regard), but is
better than the other candidate.

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SQL2219
Wow, 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
Those 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
Jury 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

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mika9090
Communism at its best.

