ASSIGNMENT:

VINFAST – RISK MANAGEMENT

MemBer : Phạm Thành Hưng - 16071181

Trần Lan Phương - 16071230
Nguyễn Thanh Sơn - 17071155
I - INTRODUCTION

VinFast (or VinFast LLC; abbreviated as VF), full name is VinFast

Production and Trading Company Limited is Vingroup's car -
electric motorcycle brand, and is the 7th core business of the Group.
VinFast was established on June/2017, headquartered in Hai Phong.
The birth of VinFast not only contributed to "writing the Vietnamese
car dream" but also opened the era of technology and knowledge-
based development for Vingroup, and also participated in promoting
the motor industry at Vietnam. VinFast has the meaning of national
pride, meeting the desire to own a Vietnamese car brand for decades.

VinFast has 2 main products: cars and electric motorcycles. In this

assignment we will concentrate on Vinfast’s cars.

II - VINFAST – RISK
Because Vinfast is the new business area of Vingroup so we can
see clearly that they have many risks to face with. But there are some
risks that more prominent than these other and aslo be the question
and concern of Vietnamese people.
1. Identify risk and analysis
1.1. Competition risk
In Vietnam, Vinfast has to compete with many reputable brand from
Korea, Japan, Germany. The information given by Vietnam
Automobile Manufacturers Association (VAMA), Toyota is the
best-selling, make up 23% of market, second place belongs to Ford
with 12%. Top ten of best selling car every month through VAMA,
there are 7 type of Japanese’s cars, 2 types of Korea and 1 from U.S.A

Moreover Vinfast has to compete with them about price. Example:

in segment A, Vinfast has Vin Fadil with the price is 336 - 423
millions VND , same with, even higher than some cars like KIA
morning (290 - 393 millions VND), Huyndai Grand i10 (345 - 405
millions VND).
Additionaly, the research of Niesel show that Vietnam take the third
place about value foreign brand above interier brand. So we can see
that Vietnamese people tend to buy big brand like Toyota, Ford,
Honda than Vinfast
In conclusion, the risk from competitors make the difficult for
Vinfast in controlling market and selling products.
1.2. Brand risk
Vinfast is the new brand on the market. So challenge here is to win
over buyers’s brand mentalty, demonstrate quality and safety and
especially create the own car brand of Vietnam.
In manufacturing, there are more than 45% of components come from
Germany company. Moreover Vinfast still depend on a lot of in
foreign R&D so if Vinfast doesn’t have action for this, in the futtre
they can not up date in time to catch up with the development trend of
market. It will affect to prestige, more seriuoly, the perish of Vinfast.
1.3. Technology/human resources risk
Car manufacturing is a completely new business field of Vingroup.
Vingroup has no experience as well as an automobile manufacturing
background. Despite the acquisition of BMW engines and production
lines, they are processed and assembled in Vietnam, so there are still
many doubts about the quality of Vinfast products. Because the
structure of a car consists of many different components. A faulty
assembly can also affect the vehicle's operation resulting in serious
accidents.
Vinfast cannot hire people from other auto assemblers, it will not be
easy for them to both train and produce products after 2-3 years. It
took many years for foreign carmakers, including training abroad to
have a team of skilled workers like today. Vinfast's problem will be
even more complicated than that, because electric cars are a new
technology. It is not easy to find training in new technologies.
Manpower can only be trained by the component supplier but they
only train on their parts and the whole car cannot.
2. Measuring Risk

Type of risk Level of risk Frequency of risk Explanning

Competition risk High High Borning late and
joining in an
industry which
appear for verry
long time with
many giants brand
had existed
before. The
competition is
unavoidable, so it
 is at high level
and high
frequency
Brand risk High Medium Although the
reputation of
Vingroup in
recent years is
very good but the
dependent too
much on foreign
R&D can
slowdown the
development of
Vinfast, so it is set
at high level and
medium frequency
Technology/human High Low Technical problem
resources risk can lead to many
serious result, but
every products
alway be tested
carefully before
selling, so the
level is high but
the frequency is
low
Human resources
can be trained
according to
European
standards by
BMW engineers

III - VINFAST - MANAGEMENT RISK

1.Competion risk
 Diversify the product : Vinfast enter the game in 3 segment : Vin
fadil (segment A), Lux A 2.0 (segment D, sedan), Lux SA 2.0
(segment E , SUV). This brings more options for the customers.
Reduce the price: After discount policy of Vinfast phase 1
+ The price of Vin fadil reduce from 432 million VND down to 336
million VND
+ Lux A 2.0 from 1.336 billion VND down to 800 million VND,
+ Lux SA 2.0 from 1.818 billion VND down to 1.136 billion VND
This increase competitive ability of Vinfast and more suitable with
the pocket of Vietnamese people
Special policy: Vinfast brings a lot of attracting policy for the
customer
+ Exchange the old to the new: when customers want to buy Fadil,
Lux A2.0, Lux SA2.0, they can bring their old car to Vinfast, Vin will
evaluate and buys that car, customer pay the difference and recive car.
Moreover Vinfast will support customers about price when buying
product from 10 million to 50 million (depent on type of car)
+ Instalment policy: payoff 30% value of product, long period, free
interest in first 2 year
Additionaly, with Vin Ecosytem and using national pride of
Vietnamese people , Vinfast has special competitive position with the
others.
One special style of Vingroup is speed along with quality. Vinfast
uses this to lead in ASEAN and catch up with worldwide brands
2.Brand Risk
The join hand with major partner like BMW, Pininfarina,... Aslo
recruited many of leading personal in the current auto industry, such
as Mr. James. B. Deluca, Former Executive Vice President of Global
Manufacturing Operation; Mr. Vo Quang Hue, Former Bosch leader
and some of the head of production division of Holden. From that,
customer implicitly understand how quality and standards Vinfast
cars are.
The event of bringing two Vinfast models to Paris Mortor Show
2018 is the smart move of Vinfast with the aim not only marketing for
the models but aslo hitting the mentality of Vietnamese people, the
appearance beside the World-class automobile names, Vinfast’s cars
seem to be upgraded and become much more attractive.Vinfast aslo
invite David Beckham to test two models, a way to confirm the
quality of its brand.

Investing in educating higly qualified worker, learning and research

in order to develope and no longer dependent on foreign resources
will improve branding for Vinfast in the futture
3.Technology/human resources Risk
3.1.Technology
155 cars of Vinfast was brought around the world for vehicles
testing and quality testing, these cars belong to first trial production
patch, of which 113 are completed and 42 semi-completed. The
transportation process is divided into serveral phases, to 14 countries
Europe, Asia, Australia, Africa and in Vietnam to ensure Vinfast’s
cars respond well to all climates and real traffic condition.
The system of tests applied to Vinfast is aslo the testing system of
the biggest cars manufacturers in the world with the highest quality
testing and evaluation euipment in the world. Passing the above
rigorous tests, Vinfast cars will achieve the ASEAN NCAP 5-star
safety certification, and aslo meet European high-end standards.
Previously, Vinfast continously send important components such as
engines, chassis, body ... to foreign testing centers to carry out
detailed tests, as well as many vehicles.
Give warranty for customer in 5 years.
3.2.Human resources
In order to have a human resource of good quality according to the
standards of participating in the manufacturing sector, Vinfast has
established a vocational training school to train 2 main disciplines:
industrial mechanical engineering and mechatronics according to the
100% German standard. . This is the preparation of human resources
to serve the auto industry. Thanks to that, Vingroup products still
ensure the best quality even with local brand cars. Even the design of
the logo and brand identity is also extremely luxurious and eye-
catching, making Vinfast's car products no less competitive than
foreign brands.
IV – RESULT
Vinfast has sold 17,214 cars including three models Fadil, LUX
A2.0 and LUX SA2.0 in 2019. Accounting for 3.66% of the market.
Due to the influence of the covid-19 epidemic, the number of cars
consumed has decreased sharply. But with total sales of 5,124
vehicles, VinFast ranked 5th in sales in the first quarter of 2020.
Statistics include passenger car lines and light commercial vehicles.

STT Hãng xe Doanh số

1 Hyundai 15.362
2 Toyota 13.748
3 Kia 5.627
4 Honda 5.290
5 VinFast 5.124
6 Mitsubishi 5.001
7 Mazda 4.889
8 Ford 3.883
9 Suzuki 2.394
10 Isuzu 1.453

Brand: Base on informations, comments from social group about

cars, and reality, Vinfast recives many positive respondings from
markets and customers. We see more and more Vinfast’s cars appear
on road.
Technical: Althought, sometime still have reports about technical
problems from customer, but the number is very few and Vinfast has
fixed it immediately. Vinfast’s care are being more and more
complete.

END