Vietnam’s largest private company Vingroup earned no economic profits, but to beat the odds soon - Part 2
In this part, we are looking into Vingroup's major moves into new industries
In 10 years, McKinsey analyzed 37 companies that moved up to the top of the power curve.

“Of those 37 companies, 34 moved with an industry,” Hirt said while showing the graph of 23 industry trends in 2020. “Which industry you play in is the most important choice that companies can make in terms of growth, and now it turns out also in terms of economic value creation.”

Indeed, Vingroup, while being widely-known as a realty and retail giant, announced in 2018 that the conglomerate would “put Vietnam on the global map of technology and industrials” with its new investment strategy focusing on technology, industrials, commercials, and services to become a global powerhouse in 10 years, marking its first massive pivotal strategy after more than 20 years in the market.

As you can see in the above graph, semiconductor, software, healthcare equipment, and technology hardware are among the top 10 fastest-growing industries. Vingroup is investing in all four in the last two years.

VinSmart, established in 2018, is Vingroup’s core arm to expand its business on a global scale. The products that VinSmart designs and manufactures include PCBA circuit boards, switches, antennas, molds, and completed products such as smartphones, connected devices (IoT), electronic products, electronics, refrigeration, computer equipment, and medical products.

During the COVID-19 crisis, VinSmart officially announced in August its cooperation with American Irish-domiciled Medtronic plc to produce components for Medtronic’s ventilators. 50,000 units of Vingroup’s ventilator components are set to be exported to the U.S. and Ireland over the next year.

Mark Mobius, the founder of Mobius Capital Partners LLP, told Bloomberg that the ambition of Vingroup is “astounding”, and “a huge win” to make Vietnam a global player.

“We want the company to tackle things that people think are relatively difficult, things that Vietnamese private enterprises have not done successfully,” Vietnam’s richest man Pham Nhat Vuong, founder and chairman of Vingroup, said in his interview with Bloomberg in June.

The most ambitious decision of Vuong would be to make Vingorup become the first and only firm in Vietnam producing cars, even though the industry was predicted to lag behind and the latest financial report of the company’s unit showed a notable loss.

Within only two years since the first manufacture house built in 2017, Vingroup has introduced to market four car models — VinFast Lux SA2.0, VinFast Lux A2.0, VinFast Fadil — with 19,400 car units ordered. Moreover, Vinfast’s order book showed a cumulative 50,000-units booking for its smart e-scooter models — Klara, Ludo, Impes, which allow both self-charge at home and battery exchange at 1,000 stations nationwide.

The decision of making cars might be questionable at the moment, but the electric vehicle line is definitely within the industry trend.

As the world is racing to cut emission levels to reach the goal of the Paris Agreement on climate change, the automobile industry is under considerable pressure. The biggest carmakers in the world like Volkswagen or Tesla are starting to produce electric vehicles and plug-in hybrids, serving the increasing demand in the European market next year, according to Financial Times.

In June, Vingroup’s spokesperson told Reuters that the company would hold a test-drive in January 2021 for its electric crossover car models designed by Pininfarina, a car design firm for long-established customers including Ferrari, General Motors, and Hyundai.

VinFast is planning for mass production of electric cars next July before foraying into the U.S. market, according to the U.S.-based online car publication
Tác giả: Bùi Thị Thanh Mai