Budget e-vehicle plans could provide VinFast competition

SAIC-GM-Wuling Automobile (Wuling), manufacturer of China’s bestselling electric vehicles (EVs), is to work with TMT to roll out budget cars. The Wuling HongGuang Mini EV will be assembled at TMT’s factory in Van Lam district in the northern province of Hung Yen, with a capacity of 30,000 vehicles per year. The model will officially receive orders and have its selling price revealed in the next few months.

Budget e-vehicle plans could provide VinFast competition

TMT said it has the exclusive authority to manufacture, assemble, and distribute the EV models in Vietnam and that Wuling would support its manufacturing by providing auto parts to ensure quality and delivery. The Mini EV will be a new option within the lower price range of many Vietnamese customers because of its small size, stylish appearance, and flexible space with four seats.

Speaking at the signing ceremony, TMT chairman Bui Van Huu said that the company hoped to make a breakthrough with the introduction of the Mini EV, to launch the segment in Vietnam and make it simpler for people to own environmentally friendly and secure vehicles.

The model is a battery-powered car that has been manufactured by Wuling since 2020. In January 2022, sales in China passed 500,000 units, becoming the best-selling EV in that country.

The Mini EV boasts features including air conditioning, power windows, a stereo system, and storage compartments. Standard safety features include anti-lock brakes, tyre pressure monitoring sensors, and rear parking sensors. Early models do not include a driver airbag, but later models reportedly will.

After success in China, Wuling EVs entered Indonesia in 2022 as an early strategy to dominate the Southeast Asian market. Wuling cars sold there are assembled on-site with a localisation rate of up to 40 per cent. The automaker included an in-car voice assistant in Indonesia and priced the minicar in the range of $16,000-20,000, targeting the country’s middle-class looking for a second vehicle.

In Vietnam, in August 2021, the Wuling Mini EV was imported by Thai Hung Company in the northern province of Thai Binh under temporary import for re-export and for research and development of EVs.

Vietnam’s current top car company VinFast was established in 2019, and by 2021 it had completely shifted production to EVs. Its models are aimed at the mid-range and luxury segments, while Wuling is positioned in the low-cost segment and is currently deemed to have the cheapest price in the world for e-cars.

VinFast holds a great advantage as its charging stations cover all cities, provinces and national highways across the country. VinFast also boasts deeper and wider promotional and incentive machines.

“It is difficult for Chinese cars to convince the higher customer segment because the initial price positioning is already very low, and over time it will not be able to improve quickly even though there are now models that are as expensive as European or Japanese cars,” said Nguyen Van Thiet, a dealer in Hanoi.

“It took nearly 10 years for Vietnamese people to be convinced to purchase models like the Zotye Z8 T700, BAIC Beijing X7, and Brilliance V7, thanks to their strong design and features. The Wuling HongGuang may be a much more difficult sell,” he added.

Thiet pointed out the Mini EV does not yet have a fast charging feature, meaning it could take around nine hours to fully charge. The car is only suitable for families with a parking space and with short travel distances during the day, and those who can charge overnight.

Vietnam is becoming an attractive destination for foreign automobile manufacturers. During 2021-2022, Cevo from South Korea unveiled plans for a mini EV to sell in Vietnam about $5,000, but so far, no partners have been finalised.

A series of other big brands of the Chinese auto industry such as Chery and BYD are also currently exploring plans to cooperate with Vietnamese enterprises to produce such cars.

The key aspect of producing EVs is the infrastructure system of dealers, maintenance facilities, and charging stations. But currently, even top brands like Hyundai and Kia do not have a network of charging stations in Vietnam, making market entry complex.

VinFast stands alone in current e-car arena The domestic e-vehicle market in Vietnam is showing signs of taking off, but some foreign manufacturers may be slow to latch onto what could be an attractive market.

Efforts needed to encourage travellers to use e-vehicles A legal framework, support policies and a concerted infrastructure system are needed to encourage people to switch to using electric vehicles, according to Director of VinFast’s charging station development centre Vu Thang.

VinFast submits IPO in the US VinFast Trading & Investment – a Vingroup subsidiary based in Singapore – has just submitted documents for its first initial public offering (IPO) in the US.