The Development Direction Of Vinfast In The Electric Automobile And Motorcycle Industry.pdf

cccccccccccesseesseeseccsecnsecnsessecsseeseeeseeneeeseseenses Al 4.2.1 Compare the number of business units of VinGroup JSC in VALIOUS FCQIONS eee cece ccee cece cccececseeesseessaessse

VIETNAM GENERAL CONFEDERATION OF LABOR

TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION

ĐẠI HỌC TON ĐỨC THẮNG TON DUC THANG UNIVERSITY

FINAL REPORT APPLIED BIG DATA IN MANAGEMENT SUBJECT

THE DEVELOPMENT DIRECTION OF VINFAST IN THE ELECTRIC AUTOMOBILE

AND MOTORCYCLE INDUSTRY

Lecturer: PH PHAN THI NHA TRUC

Group Name: GROUP 5 Class ID: 702075

HCMC, APRIL 18th, 2024

1 Phan Thị Kim Ngân 719H1169

2 Tran Nguyén Thuy Vi 719H0823

3 Nguyễn Thị Xuân Huyền 719H1153

5 Bui Van Khuong 720H0084

6 Lý Mỹ Ngọc 720H0128

7 Âu Dương Bảo Trân 720H1663

§ Nguyễn Kiều Bảo Khanh 720H0731

9 Lé Quéc Nam 720H1297

10 Nguyén Thi Thanh Thuy 720H1416

TABLE OF CONTENT

Targets and Goals

2.3.1 Overview the €niterPFISe 0 0 2221122111221 1 1115211112222

2.3.3 The pros and cons when they are running their business

2.3.4 VinFast Auto switched from gasoline to electric cars

METHODOLOGY

3.5.1 Summary data tabÌe - 2 22 2222111122213 1133212 +2

4.1.1 Macro factors cccccccccccesseesseeseccsecnsecnsessecsseeseeeseeneeeseseenses Al

4.2.1 Compare the number of business units of VinGroup JSC in VALIOUS FCQIONS eee cece ccee cece cccececseeesseessaessseesssesessesssesstseeess 47

4.2.2 Market share of electric vehicle (EV) sales in Southeast Asia as

of the 3rd quarter of 2022 by coumntty 00.0000 cece cece eee 48 4.2.3 The awareness and interest in electric cars among people in Vietnam 1n 2022 1 0121121121112 11211112121 115211 11111118 kg cay 49

4.2.4 The percentage breakdown of passenger cars 1n Vietnam in 2023

by fuel Of (ÏrIV€ - - L2 12201022011 110 11111113111 111111 11111111 k2 50

4.3.1 To manage the performance of our various sales channels, VinFast needs to be able to explore if there is a disconcerting trend of car defects on cars sold through different sales channels

52 4.3.2 Provide a visualisation ofyear-on-year trends 55

LIST OF TABLES

Table 1 Sustainable Development oa̧ c2 212119211113 111 3111111111111 8 1 1g re 4

Table 2 Sustainable Development Goals Achievements by Major Automotive Brands

Table 3 Value and Proportion in many different business fields of VinGroup 19

Table 8 Breakdown of passenger cars in Vietnam in 2023, by fuel or drive-type 29

Table 9 Operatlonal-PÏs/InefTICS c2 12113211213 111111 110111215111211 1510121111811 1 gxkp 33

Table 10 VinFast descriptive data tabÌe n1 2 21 1201111111211111111111112 11101 11 re 36

Table 12 Number of defective vehicles in America and Canada -‹‹ <- 56

LIST OF FIGURES

Figure 2 Sales of VinFast's electric cars and motorbikes 0.00 ccc ccceceeeteetreeterteenees 23

Figure 3 Some data about Vinfast in 2021-2022 000i ccceeeceeeeeeteneeesenreneeneeeneenees 27

3:20) 6089 :11) 0x00 35

Figure 6 The model about customer attitudes and intentions to purchase electric cars 38

Figure 10 Market share of major automobile manufacturers Vietnam 2023 44

Figure 11 VinFast Auto’s annual revenue breakdown by segment from FY 2021 to

Figure 13 The number of business units of VinGroup JSC in various region 47

Figure 14, Market share of electric vehicle (EV) sales in Sountheast Asia as of 34

quarter of 2022 by leading COUTITIS - 0 00211101101 111131131111111 21111111 11118111 1xkP 48

Figure 15 The awareness and interest in electric cars among people in Vietnam in 2022

CT1 TT TK TH TT TH T111 1111111111111 1111 T11 T111 11 T111 1111111111111 T11 T111 11 T111 T1 T1 pc 49

Figure 16 Breakdown of passenger cars in Vietnam in 2023, by fuel or drive-type 50

Figure 17 VinFast's main sales channels in internal and international markets 52

Figure 18 VinFast’s sales of vehicles from 202 1-2022 - ceceeceeseeteeeeteeeeneenees 53

I INTRODUCTION

VinFast is a Vietnamese manufacturer of automobiles and electric motorcycles,

established in 2017 and is a subsidiary of the VinGroup conglomerate VinFast was

established with the goal of becoming the leading automobile manufacturer in Vietnam

and the Southeast Asian region The company plans to reach a production capacity of

500,000 automobiles per year by 2025 VinFast's main products include internal

combustion engine cars, electric cars, electric motorcycles, and environmentally

friendly buses

In the early years of operation, VinFast focused on promoting its brand to

domestic consumers The company has expanded its business operations internationally,

selling vehicles in markets such as the US, Canada, Germany and France VinFast is

highly regarded for its design, technology and product quality, and has recetved many

prestigious awards However, specific information about the company's financial

situation and sales figures has not been widely published

In recent years, VinFast has strongly focused on developing electric vehicle lines,

with the goal of becoming the leading electric vehicle manufacturer in the Southeast

Asian region The company is focusing on researching and developing battery

technology, charging systems and improving the efficiency of electric vehicles

VinFast's overall direction is to become a technology-driven company associated with

smart, self-driving technology, with the goal of "smart driving, green living" and

"creating a sustainable future for everyone"

Conducting research to understand the company's business strategy, the

company's performance in the electric vehicle industry, the transition strategy to electric

vehicles, and the company's sustainable development goals

Research the goals and development directions of VinFast in the automotive

industry / Investigate the company's main products, brand positioning and competitive

advantages

Analyze the company's financial situation, sales figures and market share in the

electric vehicle sector Compare VinFast's performance with leading electric vehicle

manufacturers in the region and globally Investigate VinFast's efforts in research,

development of battery technology and charging systems Assess the level of success

1

and challenges in the transition from gasoline to electric vehicles Examine VinFast's

mission and vision to "create a sustainable future for everyone"

Investors and businesses can collect valuable information Information on

VinFast's strategy and development directions: VinFast's short-term and long-term goals

in the automotive industry, the roadmap for transitioning from gasoline to electric

vehicles, VinFast's competitive advantages and brand positioning

Information on VinFast's operational performance: Financial situation, sales

figures, and comparison of VinFast's performance with leading electric vehicle

companies Analysis of VinFast's challenges and opportunities in the electric vehicle

field Sustainability in VinFast's production and business activities

Investors and businesses can collect valuable information, such as information

about VinFast's strategy and development orientation, VinFast's short-term and long-

term goals in the auto industry, roadmap converting from gasoline cars to electric cars,

competitive advantages and brand positioning of VinFast

In this study, we analyze problems in Vinfast's business activities, micro factors

such as competitors or customer needs and expectations, and macro factors such as

GDP, CPI, etc Therefore, VinFast can use research results to improve business

operations

This paper’s research questions are: (1) Are there any specific issues affecting

VinFast's sales activities in countries in the region? (2) Why did VinFast convert from

gasoline cars to electric cars, and what is their sustainable development strategy in the

automotive industry? (3) In the current economic situation, how do macroeconomic

factors and microeconomic factors affect Vinfast's global sales?

This study applies qualitative methods, specifically the case study method, to

answer the research questions This case study analyzes VinFast's business, focusing on

sales and the transition from gasoline to electric vehicles The data collected and

analyzed in this study includes financial information, sales, market share data, and

competitor information In addition, macroeconomic factors such as GDP and CPI are

considered to impact VinFast's global sales This research includes reviewing Vinfast's

press releases as well as documents, reports, and articles related to Vinfast The results

of the analysis provide valuable insights into the specific issues affecting sales, the

drivers of the transition to electric vehicles, and the sustainability strategy that VinFast

applies to the automotive industry

Next, the structure of the following sections of this report is as follows: The

literature review in Part II provides an overview of sustainable development goals and

objectives in the automotive industry and other concept related to sustainable efforts

Part II also includes a case study of Vinfast Auto's business operations, including an

overview of the company, its commitment to sustainability, strengths and weaknesses in

its business operations, and its process conversion process from gasoline cars to electric

cars Part III talks about the methodology used in this study which is qualitative, using

case study methods integrated with top-down, DIKW and organizational methods

Results and discussion are presented in Part IV, followed by conclusions in Part V

I, LITERATURE REVIEW

21 A Theoretical Perspective on Sustainable Development Targets and Goals

Sustainable development has been defined in many different ways, but the most

commonly cited definition is from “Our Common Future”, also known as the Brundtland

Report: "Sustainable development is development that meets the needs of the present

without compromising the ability of future generations to meet their own needs.”

(Brundtland, 1987, P 43)

According to ISD (2023), The 17 Sustainable Development Goals (SDGs), also

known as the Global Goals, were adopted by all United Nations member states in 2015

and include 169 goals that countries want to achieve by year 2030 These goals and

objectives are universal, meaning they apply to all countries in the world, not just

developing countries Achieving these goals requires action on all fronts Governments,

businesses, civil society and people everywhere have a role to play Table 1 below shows

the 17 sustainable development goals

Table 1 Sustainable Development Goals

Goal 1 End poverty in all its forms everywhere

Goal 2 End hunger, achieve food security and improved nutrition and promote

sustainable agriculture

Goal 3 Ensure healthy lives and promote well-being for all at all ages

Goal 4 Ensure inclusive and equitable quality education and promote lifelong

learning opportunities for all

Goal 5 Achieve gender equality and empower all women and girls

Goal 6 Ensure availability and sustainable management of water and sanitation for all

Goal 7 Ensure access to affordable, reliable, sustainable and modern energy for all

Goal 8 Promote sustained, inclusive and sustainable economic growth, full and

productive employment and decent work for all

Goal 9 Build resilient infrastructure, promote inclusive and sustainable

industrialization and foster innovation

Goal 10 Reduce inequality within and among countries

Goal 11 Make cities and human settlements inclusive, safe, resilient and sustainable

Goal 12 Ensure sustainable consumption and production patterns

Goal 13 Take urgent action to combat climate change and its impacts*'

Goal 14 Conserve and sustainably use the oceans, seas and marine resources for

sustainable development

Goal 15 Protect, restore and promote sustainable use of terrestrial ecosystems,

sustainably manage forests, combat desertification, and halt and reverse land

degradation and halt biodiversity loss

Goal 16 Promote peaceful and inclusive societies for sustainable development,

provide access to justice for all and build effective, accountable and inclusive

institutions at all levels

Goal 17 Strengthen the means of implementation and revitalize the global partnership

for sustainable development

(Source: United Nations (2015) Transforming our world: the 2030 Agenda for Sustainable Development

https://sdgs.un.org/2030agenda ) According to the United Nations (2015) the Sustainable Development Goals

(SDG) to address the key issues facing humanity and action over the next 15 years

People: Eradicating hunger and reducing poverty, ensuring everyone can live

healthily, have resources and develop their full potential in a fair environment

Planet: Protecting our planet from environmental degradation through sustainable

production and consumption, sustainable management of natural resources and

responding to climate change to meet the needs of systems now and future

Prosperity: Ensuring a prosperous life for everyone and economic, social, and

technological progress in harmony with nature

Peace: Building a peaceful and just society, free from fear and violence

Partnership: A strengthened global partnership for sustainable development The

Firm engages all countries, stakeholders and all people and focuses on the needs of

those the poorest and most vulnerable

' * Acknowledging that the United Nations Framework Convention on Climate Change is the

ptimary international, intergovernmental forum for negotiating the global response to climate

change

The 17 Sustainable Development Goals and 169 targets constitute a collective call

to action for all humanity for a better future for all and for the Earth

2.2, Auto car industry is doing the sustainable development

industry as it grows and expands through the stages of auto production Automobile manufacturers face increasing demands due to national and global regulations on energy consumption, greenhouse gas emissions and safety These demands stem from a socio- political agenda aimed at reducing dependence on oil, combating climate change, air pollution and traffic congestion in cities Technological advances, especially in the fields of electronics and communications, are shaping the development of new means of transportation Exciting prospects are emerging for a variety of propulsion systems, including electric vehicles, hydrogen fuel cells, and biofuels

A recent study by the KPMG Automotive Institute (2020) found that the auto industry has undergone significant changes since 2017 These key trends include:

O Electric vehicles: Battery-powered cars are becoming increasingly popular (| Smart, connected cars: Cars are increasingly connected to the Internet and equipped with advanced technology

Li Hydrogen fuel cell vehicles: This technology provides an alternative to traditional gasoline and electric vehicles

O| Hybrid cars: Cars that combine electric and gasoline engines are still a popular choice for many people

In addition to these underlying trends, the industry is also seeing:

| Growth in emerging markets: Auto sales are increasing in developing countries

O Focus on mobility solutions: Companies are moving beyond just selling cars and exploring new ways to get people moving

O The rise of carpooling: More and more people are choosing carpooling instead of owning a car

O Self-driving car development: Self-driving cars are being researched and

tested

O Big data and platform strategy: Companies use data analytics and online platforms to improve their business

Ci Standardization and efficiency: Automotive parts are increasingly standardized and manufacturing processes are streamlined using digital tools

Li Limiting gasoline use: Industry is moving away from internal combustion engines

According to Koster, Kuhnert, and Stiirmer (2018), the future of cars is electric,

self-driving, shared and constantly connected The cars will run on clean electricity, minimizing carbon emissions and relying on renewable sources such as solar or wind power This change is driven by advances in artificial intelligence (AI), machine learning and deep neural networks, which are helping to make self-driving cars a reality

To maximize efficiency, the car's life cycle will be extended beyond the traditional 5-8

years Annual updates will incorporate the latest hardware and software innovations,

keeping the vehicle at the forefront of technology

Table 2 below shows the goals that five major brands have achieved We collected data from their most recently published non-financial sustainability reports for 2020 (Honda, Hyundai, Mercedes-Benz, Toyota, BMW automobile group) to evaluate their contribution to achieving the United Nations Sustainable Development Goals In addition, data was collected from the official websites of each company (Honda, Hyundai, Mercedes-Benz, Toyota, BMW) to supplement information information from sustainable development reports This comprehensive approach enables in-depth comparative analysis of the sustainability strategies adopted by these five leading automakers and their alignment with the United Nations Sustainable Development Goals

Table 2 Sustainable Development Goals Achievements by Major Automotive Brands in 2020

Sustainable Development | Mercedes

achieve food security and

improved nutrition and

promote sustainable

agriculture

Goal 3 Ensure healthy

lives and promote well-

being for all at all ages

Goal 4 Ensure inclusive

and equitable quality

education and promote

lifelong learning

opportunities for all

Goal 5 Achieve gender

equality and empower all

women and girls

Goal 6 Ensure availability and

sustainable and modern

energy for all

Goal 13 Take urgent

action to combat climate

change and its impacts*

Goal 14 Conserve and

sustainably use the

oceans, seas and marine

resources for sustainable

development

Goal 15 Protect, restore

and promote sustainable

use of terrestrial

ecosystems, sustainably

manage forests, combat

desertification, and halt

and reverse land

degradation and halt

biodiversity loss

Goal 16 Promote

peaceful and inclusive

societies for sustainable

development, provide

access to justice for all

and build effective,

contribute to goals 4, 7, 8, 9, 10, 11, 12, 13 and 17 through their strategies

2.3 VinFast Auto enterprise Case study

VinFast, a Vietnamese vehicle manufacturer, was founded in Haiphong in 2017 It

is the first Vietnamese automobile brand to enter international markets and begin manufacturing electric vehicles (EVs) The brand has recently introduced new electric car manufacturers to the market, capitalizing on the evolving trend

In June 2017, VinGroup Corporation founded VinFast Manufacturing and Trading Company Limited to carry out this initiative VinGroup presently owns all of VinFast Company, with its charter capital of 5.25 trillion VND VinGroup claims that VinFast stands for Vietnam-Style-Safety-Creativity-Pioneering, and that its purpose is to reward automobiles bearing Vietnamese names

The initial stage of a program to build vehicles and electric motorcycles in a greenfield factory on the premises is being funded with $1.5 billion USD The company stated that it is finding partners in European engineering, design, and production technologies, and that it has combined talent from several well-established companies

The first two cars, the Pininfarina-designed LUX SA2.0 and LUX A2.0, were unveiled

at the Paris Motorshow in the autumn of 2018

After more than a year of building, Vinfast unveiled its first electric motorbike

model in Haiphong in November 2018 to mark the opening of its plant that produces

electric motorcycles The first model, called Klara, will be available in two different

configurations Vinfast anticipates launching these goods on November 17 When fully charged, the cars have an 80-kilometer range at an average speed of 30 km/h Their top speed will be approximately fifty kilometers per hour The company plans to release seven various electric motorcycle models in 2019

In terms of Revenue of VinFast, they announced revenues of 28.6 trillion VND

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($1.16 billion USD) in 2023, a 91% increase over 2022 Based on previously released figures, sales increased by 133% to exceed 10.4 trillion VND in the last quarter It supplied 72,468 motorcycles in 2023 and 34,855 cars in 2023—five times as much as the previous year

It incurred enormous financial and administrative costs, in Q4 2023, there was a

gross loss of $174.9 million, and in FY 2023, it was $551.6 million Despite this, Comparing VinFast's gross profit margin to the prior fiscal year, there was a noticeable improvement The gross profit margin increased significantly from -82% in 2022 to - 46% in 2023 Gross margin was negative (40.1%) in the fourth quarter of 2023 as opposed to negative (82.6%) in the same period in 2022

VinFast plans to maintain a balance mix between cost reduction and revenue growth in FY 2024 The company will build on its achievements in reducing production and material costs and will make deliberate investments in attractive local markets

Sustainable development goals that VinFast aims to achieve include: Goal 7:

Ensure access to affordable, reliable, sustainable and modern energy for all; Goal 9:

Build resilient infrastructure, promote inclusive and sustainable industrialization and

foster innovation; Goal 11: Make cities and human settlements inclusive, safe, resilient

and sustainable; Goal 12: Ensure sustainable consumption and production patterns

Explanation:

Dr Morgan Donovan Carroll, who is currently the ESG Director (Director of

Environment, Sustainability, and Governance) of VinFast, shared that Vinfast is

continuously innovating technology to create a green environment for the future of the world VinFast's dedication to sustainability is reaffirmed by the "Corporate Sustainability Champions" of ORIGIN Innovation Awards, which also honor VinFast's endeavors in achieving company objectives via the sustainable development model (VinFastauto, November 2022), This encourages them to keep pushing the envelope and help spearhead the "green" revolution for the benefit of present and future generations VinFast is advancing the global electrification revolution and creating green transportation for industry with significant development, realizing its aim of being a leading smart electric vehicle brand in the market

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Vinfast's representative highlights at the "Net Zero - Green Transition " workshop

in 2023 that Net Zero is not a goal for the wealthy or upper class but a responsibility for everyone for a greener environment, not just for their organization but for future

generations as well "I believe that in the long term, individuals will be able to drive

electric automobiles and the market will be more accessible Electric vehicles are not as expensive as people think." The ESG Director of VinFast stressed that (Dr Morgan Carroll 2023, cited in Song Huong 2023)

In the long term, if VinFast pursues carbon credits, then greenhouse gases and carbon trapping are issues that need to be addressed Therefore, the company's goal is primarily to minimize greenhouse gasses "At the beginning of 2019, we also started to have ESG reports Carbon is a sensitive and difficult topic to store and manage Importantly, we focus on green energy through innovative activities and new technologies," Mr Carroll (2023) emphasized

Vinfast’s Electric vehicles will significantly reduce carbon emissions compared to

traditional vehicles Of course, the cost of manufacturing electric vehicles will be higher

when using alternative energy sources But in fact, nobody wants a cheap car; they want

to use a high-quality vehicle Therefore, VinFast aims to produce high-quality electric devices (Dr Morgan Carroll (2023))

VinFast is currently aiming to achieve environmental impact reduction goals Importantly, in the early stages, according to Mr Carroll, the company does not need to wait for legal regulations but should proactively implement measures to reduce carbon footprint VinFast is currently building electric vehicle charging stations, using alternative energy sources such as solar energy

"This innovative approach not only minimizes energy usage but also promotes an environmentally friendly energy ecosystem," says VinFast Auto CEO Madam Le Thi Thu Thuy "Vinfast aims to become a leader in electric vehicle development, they are committed to innovative solutions and environmental responsibility for a greener future” (VinFast Global Community, 2024)

2.3.3 The pros and cons when they are running their business The electric car market in Vietnam has a lot of potential for development thanks

to high demand, favorable socio-economic conditions and the participation of manufacturing giants in the market However, it still needs to address the challenges of

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infrastructure, production experience, as well as promote preferential policies to promote a new ecosystem quickly and efficiently in the coming time

Economic growth and a growing young population: Vietnam has a population of about 97 million, ranking 14th in the world More than 69% of the population is of working age between 24-64 years old Besides, Vietnam's GDP also grew steadily from 5-7% per year in the period 2008-2018 These are favorable factors for the development

of the automobile market in general and electric cars in particular

Competitive participation of major automakers in the market: Some big

automakers such as Honda, Fuso have been present in the Vietnamese market and

started deploying electric car products In particular, the investment of Vingroup through the VinFast brand also creates new expectations for Vietnam's automobile industry

High preferential policies for consumers: Vietnam has certain preferential policies such as import tax exemption for some electric cars imported from ASEAN countries

and China This eases the cost burden on consumers

Cons:

Inadequate infrastructure: The system of charging stations, maintenance service centers for electric cars in Vietnam has not been built synchronously and meet the demand This may affect the popularity of this type of means

Limited production experience: Domestic automakers still mainly focus on traditional vehicle development, not having much experience in the field of electric cars Most of the current electric car models in Vietnam are imported cars

Inadequate preferential policies: Although there are some tax incentives, there are still some barriers such as excise tax of up to 70% for some imported electric vehicles

This increases the cost of vehicles, affecting consumers

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2.3.4 VinFast Auto switched from gasoline to electric cars

2.3.4.1 Why did they switch from gasoline to electric cars

Environmental change and global warming have been popular themes of discussion and attention recently These occurrences are brought on by a variety of factors, including burning fossil fuels to produce energy and electricity, the greenhouse effect, and the extraction of resources such as natural gas and oil Moreover, transportation oil makes up 70% of passenger cars Globally, as a result of China's and India's expanding middle classes, the need for passenger automobiles has soared, increasing oil consumption By

2050, there may be more than 1.5 billion automobiles on the road, compared to 750

million in 2010 Since oil is becoming a more rare and limited resource, the big businesses use electric energy as a substitute fuel for transportation in order to achieve major economic and environmental benefits Traditional combustion engine automobiles will eventually be replaced by electric vehicles It leads to a decrease in the quantity of

carbon dioxide emitted

Electric vehicles are a vital component of the worldwide movement to combat climate change and promote sustainable behaviors because of their numerous environmental benefits By lowering greenhouse gas emissions, enhancing air quality, boosting energy efficiency, and lowering our reliance on fossil fuels, electric vehicles (EVs) are hastening the shift to a cleaner, greener future VinFast is certain that

governments, businesses, and individuals must continue to push the growth and use of

these vehicles in order to fully fulfill the potential of electric cars and usher in the next phase of sustainable mobility

Reasons why VinFast switch from gasoline to electric cars:

pollutants like nitrogen oxides, carbon dioxide, and particulate matter which contribute to

air pollution and global warming are disregarded

Benefits for Human Health

14

Pollutants from traditional cars, like volatile organic compounds and nitrogen oxides, are responsible for particulate matter and smog production The health impacts of these pollutants are severe, especially for vulnerable groups such as the elderly, children, and those suffering from respiratory illnesses By converting to electric vehicles, cities can significantly reduce local air pollution and promote healthier, cleaner urban environments

Vinfast emphasizes the benefits of electric vehicles This means that they not only immediately improve the environment but also have the potential to enhance human health and improve air quality

Decreased Level of Noise Pollution

Vinfast representations emphasize the advantages of quieter operation for the environment than traditional vehicles, since electric vehicles may mitigate noise pollution VinFast's vehicles are quieter than conventional automobiles with internal combustion engines, operating silently This makes the streets calmer and reduces the stress that comes with noise for both city dwellers and wildlife

"Quality of life is an important, but constantly overlooked, environmental

organization aims for their customers who use VinFast brand to have a positive experience With VinFast's vision, they know that customers using their electric vehicles will receive positive feedback from those around them if they have a good experience

Take advantage of the domestic market:

Li The report emphasizes that VinFast has many advantages when participating

in the Vietnamese automobile market Firstly, Vietnam has great demand and potential for the development of automobiles in general and electric cars in particular Statistics show that 84% of Vietnamese people link electric cars with battery vehicles (BEVs) and 33% intend to buy electric cars as their next vehicle This creates a huge opportunity for VinFast when promoting the development of electric car models

O Second, VinFast enjoys strong support from the Vietnamese government in its development Preferential policies on import tax, excise tax exemption for

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some electric vehicles are helping to reduce the cost burden for consumers, creating conditions for the development of the market

In addition, consumers’ love for Vietnamese goods is also a great advantage for VinFast when developing Vietnamese-branded electric vehicle products Exploiting advantages from parent group Vingroup:

(| VinFast is a subsidiary of VinGroup - the largest private corporation in Vietnam, with good financial position and business results This helps VinFast get the resources and ecosystem needed to promote product and technology development, including electric vehicle models

O In addition, with VinGroup's position, VinFast also easily establishes relationships with major automobile manufacturers in the world to cooperate, learn experience and technology to produce electric vehicles

Focus on developing electric vehicles:

| The report shows that VinFast has successfully developed two electric car

models, sedans and SUVs, and successfully debuted at the 2018 Paris Motor

Show This shows that VinFast is focusing very strongly on developing electric vehicle products, in line with the general trend of the market

O The focus on electric vehicle models helps VinFast grasp the needs and new trends of consumers, thereby effectively capturing market share

Early launch plans:

Oi VinFast is expected to launch its first product in 2019, only after a successful debut at the 2018 Paris Motor Show

Ol This early product launch strategy will help VinFast quickly build its brand and capture market share in the context of Vietnam's rapidly growing automobile market This will be an important stepping stone for VinFast to become a leading automobile manufacturer in Vietnam and Southeast Asia as targeted

16

Ill METHODOLOGY

In our research aimed at providing insights into the sales challenges faced by VinFast, we employed a combination of qualitative and quantitative methodologies To gain a comprehensive understanding, we utilized various qualitative approaches, with particular emphasis on the observation method and case study method These methods played a significant role in examining VinFast's operations in the Vietnamese market, drawing from concepts such as the top-down method, DIK Ws method, and organization method derived from the field of big data analysis

The case study method, widely acknowledged in the realm of business economics, offers a valuable tool for analyzing the behaviors of firms and organizations, making it highly suitable for our research on VinFast's strategies and operational movements

To assess the behaviors of Vietnamese consumers and their impact on VinFast's

particularly relevant By examining recent records and market dynamics, we were able to gain valuable insights into consumer preferences and current market trends

In addition, following the recommendation of Soiferman, L K (2010), we adopted

a deductive method characterized by a "top-down" approach This involved formulating theories and hypotheses, collecting relevant data, and drawing conclusions Through the application of quantitative strategies and descriptive statistical techniques, we analyzed statistics data from VinGroup and VinFast, facilitating a deeper understanding of the relationships among variables

By employing a combination of qualitative and quantitative methodologies, we aimed to provide comprehensive insights into VinFast's sales challenges and contribute to their strategic decision-making process

working our way down

Using synthetic data sets, we were able to replicate numerous scenarios and investigate potential trends and patterns This method gave great insights into the larger industry landscape and allowed us to analyze several aspects that may affect Vinfast's success

Furthermore, reviewing Vingroup's official statistics helped us to gain insight into the company's overall strategies, market positioning, and financial performance This information serves as a foundation for further investigation into Vinfast's unique data and activities

Vingroup is a diversified conglomerate in Vietnam established in 1993, formerly known as Technocom Group Currently, Vingroup's three main operating segments include:

- Technology - Industry

- Trade and Services

- Social Welfare Currently, Vingroup has over 55,000 Vietnamese and international employees operating in its core sectors

Vingroup's consolidated net revenue for 2022, including revenue from real estate

transfers, reached 130.759 trillion VND, equivalent to the income level of 2021 In

2022, pre-tax profit reached approximately 12.8 trillion VND and after-tax profit reached 1.982 trillion VND

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Table 3 Value and Proportion in many different business fields of VinGroup

Value (Billion Proportion Value (Billion Proportion

Providing hotel, tourism and

Table 4 The subsidiary branches of VinGroup

District/ Vinhome Vincom

City Vinfast Vinpearl VinWonder s Retail VinUniversity Vinmec Vinschool

educational institution, VinUniversity, has only one branch in Hanoi Proving that the

group is promoting the development of electric vehicle production according to

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international sustainable development goals, as well as a vision for this potential market

20

3.2.2 Overview data VinFast

Table 5 Vinkast's sales figures from 2019 to 2022

VinFast's sales figures have experienced significant fluctuations For motorcycles,

in 2020 and 2021, the number of electric motorcycles sold decreased significantly due

to the impact of the Covid-19 pandemic and economic downturn Particularly in 2022, VinFast began transitioning to electric vehicle business and ceased gasoline vehicle

Figure 1 Vink'ast Auto’s annual operating expenses

In 2022, Vinfast focuses on research and development to improve the quality of its products Compared to 2021, Vinfast spent more than double the amount of

21

investment in research and development with 19,939.9 billion VND In addition, costs

such as administrative costs, distribution and sales costs also increased significantly to promote the sales department, directly increasing revenue for Vinfast In addition, due

to product development thanks to the R&D department, the cost Vinfast must compensate customers has also decreased significantly, compared to VND 4,340.3 billion in 2021, by 2022, this number will only be 109 billion VND .4 billion VND 3.2.3 Organizational Structure

Vinfast is the first electric car brand in Vietnam under the VinGroup

conglomerate Established on September 2, 2017, Vinfast 1s an abbreviation of the

phrases: Vietnam - Style - Safety - Creativity - Pioneering Vinfast's vision is to become

a leading smart electric vehicle brand driving the global electric vehicle revolution

Vinfast's main products include electric vehicles such as cars, buses, motorcycles, and electric bicycles

The organizational structure of Vingroup is divided into three main strategic components: the General Shareholders’ Meeting, the Board of Directors headed by Chairman Pham Nhat Vuong, and the Executive Board headed by CEO Nguyen Viet Quang Among these, the General Shareholders’ Meeting acts as the Supervisory Board, the Board of Directors serves as the internal audit body, and the Executive Board manages the entire central apparatus including the Finance Department, Strategic Partnerships Department, Foreign Economic Department, Legal Department,

Communications Department, Environmental and Social Department, Administration,

and Risk Management Department

Additionally, the General Shareholders' Meeting, the Board of Directors, and the

Executive Board will agree upon and articulate development strategies for the entire corporation For example, in 2022, VinGroup will focus on three main areas: Technology - Industry, Trade and Services, and Social Welfare

About VinFast, after consultation, we determined that Vinfast has 4 core teams: Sales

Not only for the VinFast brand or the automotive industry worldwide, but the sales department plays a core role in most businesses today Supported by the marketing department, the sales department is where VinFast's products are directly delivered to

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consumers by conveying product information This can also be referred to as the "root"

of a company because it is mainly responsible for generating revenue to sustain the operations of other departments

Sales of VinFast's electric cars and motorbikes

mu Gasoline car wElectriccar wm Electric motobike

Figure 2 Sales of VinFast's electric cars and motorbikes

VinFast's revenue primarily comes from manufacturing gasoline-powered cars,

electric cars, electric motorcycles, electric buses, and electric bicycles at factories both

domestically and internationally, selling them through showrooms in Vietnam and numerous countries across continents VinFast's revenue steadily increased from 2019

to 2021 However, in July 2022, VinGroup announced the cessation of gasoline vehicle

production and sales, transitioning entirely to electric vehicle production and sales This caused VinFast's revenue from gasoline cars to decrease from 35,700 units to only 24,000 units, with electric vehicles accounting for only about a quarter of the total

Research, development and manufacture

If the sales department is the root of a tree, then R&D is the diligent engineers constantly innovating to improve and enhance the quality of the company’s products R&D continuously researches and invents new technologies, features, or production processes to create novelty and innovation that attract a wide range of customers

In addition, the production department relies on research from R&D as well as product strategies from the leadership to manufacture high-productivity and highest- standard quality products The production department directly determines the quality and quantity of vehicles produced and can be seen as the entity that creates tangible

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value for the company to deliver to customers VinFast has a system of manufacturing plants and technology research centers located in many countries with the aim of

continuously researching to upgrade and develop its products Furthermore, each

VinFast product undergoes testing before being launched on the market, including

safety crash tests, engine performance and electronic system tests, and evaluations of operating capabilities in various conditions

During the production process, VinFast utilizes high-level automation robot

systems and strict quality control processes at its factory in Hai Phong Every process from assembly, painting, to final inspection is automated to ensure that each vehicle produced meets the highest standards

Some research activities invested by VinFast include:

In March 2022, VinFast announced plans to build an electric vehicle manufacturing plant in North Carolina The VinFast plant will be located in the Triangle Innovation Point industrial park in Chatham County with an area of about 800 hectares, including two main areas: Electric car and electric bus manufacturing and assembly area, and supporting industrial area for suppliers Phase one of the project has a capacity

of 150,000 vehicles per year, expected to be operational by 2025 The first models to be produced at the plant include the VF 8 and VF 9

In addition, in late Q3 2022, VinES announced the completion of construction and installation of the production line for the cylindrical cell battery plant, used to manufacture battery cells for VinFast's electric car and electric motorcycle models

Also, in early 2022, VinFast began taking orders for the VF8 and VF9 models and

is scheduled to deliver them to customers by the end of 2022

Post Purchase service

The after-sales service department is one of the crucial factors determining whether customers will return or spread positive word-of-mouth and refer new customers to the company When products encounter issues or factors that dissatisfy customers, good after-sales policies can dissolve criticism, gain acceptance, and lead to customer satisfaction Some after-sales services from VinFast include:

Emergency roadside assistance: In case of emergencies, customers can immediately contact the support and roadside assistance hotline 24/7 through VinFast's

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vehicle support phone number: 1900 23 23 89 Currently, support services are implemented nationwide, applicable to all VinFast electric and gasoline vehicle models Upon receiving information from customers, VinFast technicians will immediately provide assistance at any time and location The VinFast rescue team will tow the vehicle to the nearest distributor or service center for damages within VinFast's warranty scope that VinFast evaluates cannot be repaired on-site

Warranty policy: The warranty period for VinFast vehicle models can extend up

to 10 years or 200,000 km, applicable to malfunctions caused by software errors, component quality issues, or assembly errors by VinFast, provided that the product is used and maintained properly

Market development department

This can be considered as the guiding principle of other departments through their policies and strategies

Depending on each market segment and the targeted market, the sales, product development and manufacturing, and after-sales departments will have different operational policies and strategies tailored to the current market

In addition, the market development department will research, evaluate, and identify new potential markets for VinFast to expand its target market, increase customer diversity, and develop products in various directions to boost sales

Furthermore, VinFast is striving to strengthen its position in the global electric vehicle market by leveraging new partnerships with distributors and dealers in selected

markets, including North America, Europe, Vietnam, and Southeast Asia

On July 28, 2023, VinFast broke ground on a new electric vehicle production facility in the United States This event marks a significant step forward in global expansion and supply chain development in North America

On July 3, 2023, in Berlin, Germany - Vietnamese electric vehicle (EV) manufacturer, VinFast, opened a new showroom in Berlin The new store is the third

store in Germany and continues to expand the brand's network throughout Europe

VinFast Berlin joins existing stores across Europe, including Cologne and

Oberhausen in Germany, Paris Madeleine, Paris Raspail, Rennes in France, and

Amsterdam and Rotterdam in the Netherlands Additional locations are expected to

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open soon in Hamburg, Munich, and Frankfurt in Germany, The Hague in the Netherlands, and Nice and Montpellier in France

3.2.4 Company history

Vinfast is a Vietnamese automotive brand owned by the VinGroup conglomerate, established in 2017, quickly becoming the largest car manufacturer in Vietnam Vinfast's headquarters are located in Hai Phong, Vietnam

For birth and development, Vinfast officially unveiled its first three car models at

the Paris Motor Show in 2018 and began selling in the market in 2019 Within just one year, Vinfast became the leading car brand in Vietnam with the highest sales volume in all three segments they entered

Since 2021, Vinfast has been expanding its product portfolio by introducing the first electric motorcycles and electric buses in Vietnam Vinfast's goal is to become a global force in the rapidly growing electric vehicle industry Vinfast ceased production

of gasoline-powered vehicles at the end of 2022 and focused entirely on electric vehicles This opens up a new era for Vinfast specifically and the automotive industry in

commitment

Vinfast not only focuses on the domestic market but also aims to expand globally With the establishment of manufacturing plants in North Carolina, USA, and plans to build additional plants in Germany and the United States, Vinfast is preparing for a future where they will lead the global electric vehicle industry

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3.3 DIKW model

(care) WISDOM

'Vnfasts announcement to slop producing

= KN0WLEIDDE asec the company number of cars sold during this period to slow coun nthe

Three data are used for analysis:

Figure 3 Some data about Vinfast in 2021-2022

Table 6 Annual revenue

FY 2021 to 2022 (in billion Vietnamese Dongs)

VinFast's annual revenue data for the period 2021-2022 recorded a slight decrease

of about 10% Looking at the data shows that Vinfast's car sales revenue in 2021

decreased from 13,898.6 billion VND to 12,391.5 billion VND in 2022 Although there

is a slight decrease in car sales revenue, in other segments of Vinfast there is still a

decrease significant growth such as revenue from selling spare parts and components

increased from 538.2 billion VND to 2072.6 billion VND In addition, services or rental

activities also help bring in significant revenue for Vinfast

Although Vinfast's car sales revenue tends to decrease during this period, Vinfast

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still tries to diversify its revenue sources through other business activities From there, it can be seen that, besides selling cars, Vinfast is also trying to expand its business activities to maintain a more stable and sustainable income

Also during this period, VinFast Auto's operating costs increased significantly, which could also be one of the important factors affecting the decrease in annual revenue

Table 7, Annual operating expenses

fiscal years 2021 and 2022 (in billion Vietnamese Dongs)

Sales and distribution costs, along with administrative costs, have increased

significantly During this period, VinFast may have focused more on expanding markets and increasing access to diverse customers in other countries There is strong potential for using electric vehicles such as Thailand, Indonesia, Singapore, Malaysia, etc

The increase in the above costs can reflect that Vinfast has focused on developing and improving the quality of its products and services to meet the needs and maintain customer satisfaction in the future fiercely competitive market today Thereby, it also raises questions about Vinfast's ability to maintain profits and grow revenue in the long term

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Table 8 Breakdown of passenger cars in Vietnam in 2023, by fuel or drive-type

electric cars

It can be seen that gasoline is the fuel that Vietnamese users prefer the most, accounting for 80.66% Besides, although the proportion of other fuel types such as Hybrid and Electric is not too high, it is still very noticeable, showing that Vietnamese consumers today are also starting to be interested in using fuel types more environmentally friendly means

Main problems:

On January 6, 2022, Vinfast announced 3 new electric car models and then

officially switched the entire model to producing pure electric cars This news is both positive and proves the development of Vietnam's electric vehicle manufacturing industry, but along with it comes doubts about the performance and quality of consumers Concerns about electric vehicle ownership are relatively new, although consumers know electric vehicles will develop in the future Vinfast's announcement to stop producing gasoline cars has caused the company to slow down in the number of cars sold during this period

Main reasons:

New sales strategies and approaches to potential customers, changes in purchasing policies in the new phase of business transformation cause car sales and merchandise sales to decrease

The rudimentary nature of electric vehicle products has not impressed consumers

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in terms of design, technology, comfort and style, increasing investment costs for research and development

Vietnamese people tend to prefer to buy cars that run on gasoline or hybrid fuel rather than electric vehicles because there are many barriers such as concerns about lack

of infrastructure, lack of charging stations or long distances, concerns about vehicle safety Rechargeable battery, battery charging time, high price, causing low purchasing power of electric vehicles, reducing sales revenue of Vinfast's electric vehicles

Electric car prices are currently still higher than gasoline cars, so consumers consider buying electric cars, which can also easily affect electric car sales electric car companies, including Vinfast

In the period 2021-2022, due to the impact of the Covid-19 epidemic, there has been a crisis of chip shortage and supply disruption This affects the vehicle production schedule due to the lack of components, causing sales revenue to decrease

Using this framework, we will perform our study in three layers: strategic, tactical, and operational This multidimensional technique enables us to thoroughly study the data, starting with the strategic layer and progressing to the tactical and operational layers

At the strategic layer, we will focus on Vinfast's overall organizational goals, market positioning, and long-term strategies This gives a high-level summary of the company's strategy and allows us to better grasp their entire approach to the electric car business

Moving on to the tactical layer, we'll look at more particular topics including marketing campaigns, product development projects, and distribution networks This layer allows us to study the intermediate activities and decisions made by Vinfast to carry out their strategy effectively

Finally, at the operational layer, we will focus on Vinfast's daily activities This involves looking at manufacturing processes, supply chain management, and customer interactions By evaluating the operational model, we obtain insight into how Vinfast's activities and practices at the granular level contribute to overall success

Using the organisational method, we can completely examine Vinfast's data and

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behaviors This enables us to comprehend the interplay between strategic choices, tactical implementations, and operational execution, offering a comprehensive picture

of the organization and its performance in the electric car manufacturing business

3.4.1 Strategic goals:

VinFast's transition to electric vehicle production is part of the company's long- term strategy, as well as VinGroup's because of the general global support and positivity for the development of electric vehicles VinFast has also been building its own development goals, typically some of the following projects

O_ Review and adjust purchasing strategies to suit the business transition period

At the same time, offer incentive programs, after-sales service packages or campaigns to exchange old cars for new ones to attract customers

O Integrating new technology and building a support system for VinFast car users are strategies to increase the company's reliability and also to compete with other competitors (HERE ISA Map, ISA-— Intelligent Speed Assistance, )

Cl Developing additional infrastructure such as building and developing charging station systems, widely arranging charging stations and maintenance areas across the country helps users no longer worry about problems related

to charging stations and vehicle maintenance and safety This helps customers

trust and choose to use electric vehicles more

(| VinFast can consider offering promotions, car discounts or providing customers with attractive financial packages, offering solutions to help customers easily choose to buy a car

O To avoid the situation of lacking components or depending on one source, Vinfast can find a variety of other sources of supply or have a backup plan to avoid being affected by external factors such as the chip sales crisis similar

leads in the future

(| VinFast can shape new business strategies, decide on resource allocation and promote products with the goal of ensuring sales growth to recover capital from research investments, as well as the company's future success

Oi VinFast establishes new projects to increase its coverage through a market

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