Vinfast – a young Vietnamese company
Vinfast belongs to the Vingroup conglomerate and is only 7 years old. It is another venture of the supposedly richest Vietnamese, who started by exporting soups to Ukraine. Pham Nhat Voung he decided that after tourism and real estate, he would focus on electric cars, which are sold in America. He spent a lot of money on foreign know-how. The first head of Vinfast was the former GM executive vice president for global production – Jim DeLuca, the basic technologies come from BMW, the body was designed by Italians. He built the first Vinfast factory in Haiphong. It is automated. The heaviest tasks are performed by over 1,000 robots. Even considering Asian conditions, the pace of work required by Vounga is unbearable for some workers and managers, and labor costs are lower than in China. The current head of Vinfast, Mrs. Thuy Le, used to comment on these assessments by saying that “Vinfast is not for everyone.”
Memories of the successes of Asian dragons and tigers caused a frenzy among investors buying VinFast shares on the NASDAQ stock exchange in the summer of 2023. The debut there was possible thanks to a technical merger with a company called Black Spade, created according to the concept of SPAC companies, used to circumvent strict regulations on initial public offerings (IPO). At the end of August 2023, Vinfast was worth $160 billion – more than GM and Ford combined. The crazy price is the result of a small number of shares in circulation and a great will to speculate. Today, the company's capitalization is approximately USD 11 billion.
To conquer America
Going on an adventure with the American market, Vietnamese they probably included in their calculations three trillion dollars (3,000 billion) of President Biden's investment program aimed at jump-starting and “greening” the industry. Although they do not benefit from loans backed by the federal government, they have been welcomed with open arms by Chatham County and authorities North Carolina., both centers with plans to create new jobs and expand the tax base. Vinfast he also took advantage of the window of opportunity that appeared as all U.S. relations with China deteriorated. Americans realize the benefits of mass, cheap imports of anything from Asia, so good relations with Vietnam have become an advantage for Washington.
The American plant is scheduled to open in 2025. However, even at home, Vinfast sales are still small, although the information with a strong flavor of aggressive PR mentions exports to the USA, Canada, and soon also to the European Union. In the first half of 2023, the total sales of the plant in Haiphong amounted to barely PLN 10,000. pieces against nominal production capacity of up to 300 thousand. annually. Moreover, most of the cars sold in Vietnam go to taxi companies Pham Nhat Voung. The situation is similar in the United States, where sales of electric SUVs cost approx. PLN 50,000. hole. per piece, imported from Vietnam, is practically imperceptible (according to Reuters, 137 cars in the first half of 2023). Is this a harbinger of disaster? It cannot be ruled out, especially since Vietnamese wages and labor races cannot be transferred to the United States. But the Vietnamese are persistent, even stubborn, and half a century ago, even in the technically lazy Polish People's Republic, people were talking about “Asian trash from Japan”. And where are those times?
The future of Vietnam
The Economist – the most opinion-forming weekly in the world – emphasized on January 24 this year. in the title of the article that “There are few countries in a better position to achieve wealth than Vietnam.” When the authorities began to take the economy seriously 40 years ago, the GDP per capita of the Vietnamese was half of that of the Kenyan. Since then, it has increased 6 times and is currently (2022) the equivalent of $4,200, while in Kenya it is now twice as small. Not only the communist authorities are pragmatic in their approach to the economy. Despite the horrors of the war with the dominant participation of the USA (but also the USSR on the other side), as many as 85 percent inhabitants have a good opinion of America, while only 1/4 of Vietnamese have a good opinion of China. It is worth mentioning here that in 1979, China invaded Vietnam in a failed attempt to force Hanoi to withdraw Vietnamese troops from Cambodia that had entered there to overthrow the murderous Pol Pot regime supported by Beijing. In the background was the conflict between Moscow and Beijing at that time, but what is important is that, exhausted by the war that had barely ended, the equally communist Vietnam successfully resisted China, which withdrew after a month.
The diligence of the Vietnamese
At the origins of Vietnam's growth is especially great diligence of the Vietnamese. However, you will not achieve much with “unarmed” work – you need capital. Over the past 15 years, foreign direct investment in Vietnam has accounted for 4.5 percent each year. up to 5.5 percent GDP and had a value of USD 36.6 billion in 2023. The same share for Indonesia, the Philippines and Thailand was on average twice as low throughout the period. As a result, e.g. Samsung and Apple factories operate in Vietnam, and more delegations arrive for the talks. Most recently with Boeing and Meta. Vietnamese is a nation of very efficient merchants. Good education, low salaries, and no threat of Islamic terrorism are other advantages of the country.
However, it is quite possible that Vinfast's American venture will prove premature. Vietnam's success so far is unquestionable, but it will continue to become more and more difficult. Montesquieu wrote before the Great French Revolution that “The productivity of the land depends not so much on its fertility as on the freedom of the inhabitants.” Although the Vietnamese apparently behave more freely than the Chinese, the communist autocracy is doing harm to the state, the economy and, above all, society. Since January 2023, the second president of the country has resigned from office. From Aesop's official statement one can guess that it was again about corruption. This is a great plague. A trial is underway in the metropolis of Hồ Chí Minh City for embezzlement of as much as $12 billion. in Saigon Joint Stock Commercial Bank. Although, according to the local protocol, the president is only the third person in the country, the resignations of such people may herald a conflict in the party authorities, which is unclear whether it would be good or bad for Vietnam.
