What’s behind VinFast’s pricing strategy?
Nguyen Thanh Hai, dubbed ‘Hai Kar’, who was formerly in charge of marketing for Bentley and Lamborghini, was present with others at the launch of VinFast cars at Thong Nhat Park in mid-November.
When hearing the prices of three models that Vingroup’s CEO Nguyen Viet Quang mentioned in his four-minute speech, Hai turned shook his head.
“I was shocked about the prices announced by Vingroup. I am sure the selling prices are below production costs,” he said.
Experts say the Vietnamese car maker has included many outstanding features on its first models, which are being offered at incredibly low prices.
The two sedans and one SUV model of VinFast have prices lower than those in North America, where similar models BMW X5 and BMW Series 5 are priced at $50,000-60,000.
“I guessed VinFast’s two sedan models would be priced at VND1.3-1.5 billion. The price below VND1 billion is unimaginable for a sedan,” Hai said.
“A car in such a market segment, priced at such level, doesn’t necessarily have so many features,” he said. “I can say for sure that the SUV model VinFast has launched is equipped with devices which are never seen in cars priced at VND1 billion or so.”
Analysts all predicted that VinFast’s first models would have selling prices of no less than VND1 billion, similar to luxury models Mercedes-Benz, BMW, Audi and Lexus.
Whatcar’s CEO Nguyen Manh Thang said that VinFast “plays as a big guy” even though it is just an infant.
VinaFast’s sedan, at VND800 million, is cheaper than Toyota’s Corolla Altis and equal to Mazda 6.
VinFast cars are made on a BMW license, and 75 percent of VinFast cars are similar to BMW’s.
“I think the preferences offered by VinFast in the first period are to stimulate demand and increase competitiveness,” Manh said. “I think for VinFast, its first goal is conquering the market, not profit. This is the way a big player follows.”
The first client who ordered a Lux SA 2.0 is a Vietnamese businessman in the logistics industry.
The businessman, Nguyen Anh Tuan, born in 1982, paid a deposit to buy the car at the launching ceremony in Hanoi on November 20. The SUV model is the most expensive model of the manufacturer. The commercial version of the product is not available and Tuan will get delivery in September 2019.
Tuan said he was impressed with the large central screen, which can be made only by large manufacturers.