VinFast sedan, SUV should cost around $50,000

Created 06 October 2018
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Experts say VinFast’s sedan and SUV should cost below and just above $50,000, respectively, to be competitive in Vietnam.
Vietnam's first domestic car manufacturer bets big at Paris Motor Show

at the Paris Motor Show this month has sparked much speculation among Vietnamese customers on the selling price of the two models expected to hit the domestic market next year.

Apart from promising “high-end cars at reasonable prices”, the automaker has not revealed any concrete price range.

Industry analysts say vehicle prices depend on multiple factors such as dimensions, comfort, vehicle safety technology, operation, design as well as production, assembly and localization.

However, these factors will only amount to a base number, as would depend heavily on the brand’s business strategy, they add.

The marketing and sales director for a Japanese automaker believes that reasonable price tags for the sedan and SUV should fall approximately below VND1 billion ($42,800) and VND1.2 billion ($51,300) respectively.

Product position is crucial to any car brand, he explained. The company cannot just simply open with high prices and lower them once it achieves a desired market share. The strategy may seem workable at first glance, but runs the potential risks of previous customers feeling that they have lost something, and therefore, turn their backs on the brand.

He also believed that LUX A2.0 and LUX SA2.0 are not VinFast’s ‘trump cards’. Initially, the manufacturer may accept not to prioritize profits. Attention and acceptance of the brand, especially for new products, would in fact be the most important factors when entering a new market.

The director of a distributor of imported German cars said he also believes reasonable prices should hover around the VND1 billion mark. If the price is set between VND1.4-1.6 billion ($59,900-68,500) as per, the company will be creating obstacles for itself, as VinFast is still very young.

“Even if VinFast is 5 to 10 years ahead of other companies, it would still need just as much time or longer to establish a brand and build customer trust,” he said. "The initial ‘national pride’ and excitement for novel products will inevitably cool down over time."

Moreover, he said, it would take at several years after the models hit the road to verify their quality and durability, not the mention the fact that technology and equipment for the cars have not yet been finalised.

Bui Sinh, who has held senior positions with several luxury car brands in Vietnam, praised VinFast’s ‘clever’ strategy to start with high-end models. “Once you make a good impression with a mid-range or above product, making small cars will be easy”.

VinFast had not done the opposite, as in reality many automakers specialising in affordable cars faced much difficulties expanding upwards into luxury segments, he added.

However, Bui Sinh reminds that caution must be taken with a low pricing strategy. If the market response does not meet the company’s expectations, the company would be locked into covering losses over the next few years.

On specialist said: “If customers are enthusiastic over a VND1 billion car, selling smaller models at VND300-400 million ($12,800-17,100) will be much easier.”

Vietnam's first domestic car manufacturer bets big at Paris Motor Show

Source: VNE

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