VinFast sedan, SUV should cost around $50,000
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Experts say VinFast’s sedan and SUV should cost below and just above $50,000, respectively, to be competitive in Vietnam.
VinFast’s debut at the Paris Motor Show this month has sparked much speculation among Vietnamese customers on the selling price of the two models expected to hit the domestic market next year.
Apart from promising “high-end cars at reasonable prices”, the automaker has not revealed any concrete price range.
Industry analysts say vehicle prices depend on multiple factors such as dimensions, comfort, vehicle safety technology, operation, design as well as production, assembly and localization.
However, these factors will only amount to a base number, as the final price would depend heavily on the brand’s business strategy, they add.
The marketing and sales director for a Japanese automaker believes that reasonable price tags for the sedan and SUV should fall approximately below VND1 billion ($42,800) and VND1.2 billion ($51,300) respectively.
Product position is crucial to any car brand, he explained. The company cannot just simply open with high prices and lower them once it achieves a desired market share. The strategy may seem workable at first glance, but runs the potential risks of previous customers feeling that they have lost something, and therefore, turn their backs on the brand.
He also believed that LUX A2.0 and LUX SA2.0 are not VinFast’s ‘trump cards’. Initially, the manufacturer may accept not to prioritize profits. Attention and acceptance of the brand, especially for new products, would in fact be the most important factors when entering a new market.
“Even if VinFast is 5 to 10 years ahead of other companies, it would still need just as much time or longer to establish a brand and build customer trust,”
The director of a distributor of imported German cars said he also believes reasonable prices should hover around the VND1 billion mark. If the price is set between VND1.4-1.6 billion ($59,900-68,500) as per, the company will be creating obstacles for itself, as VinFast is still very young.
“Even if VinFast is 5 to 10 years ahead of other companies, it would still need just as much time or longer to establish a brand and build customer trust,” he said. “The initial ‘national pride’ and excitement for novel products will inevitably cool down over time.”
Moreover, he said, it would take at several years after the models hit the road to verify their quality and durability, not the mention the fact that technology and equipment for the cars have not yet been finalised.
Bui Sinh, who has held senior positions with several luxury car brands in Vietnam, praised VinFast’s ‘clever’ strategy to start with high-end models. “Once you make a good impression with a mid-range or above product, making small cars will be easy”.
VinFast had not done the opposite, as in reality many automakers specialising in affordable cars faced much difficulties expanding upwards into luxury segments, he added.
However, Bui Sinh reminds that caution must be taken with a low pricing strategy. If the market response does not meet the company’s expectations, the company would be locked into covering losses over the next few years.
On specialist said: “If customers are enthusiastic over a VND1 billion car, selling smaller models at VND300-400 million ($12,800-17,100) will be much easier.”
Questions & Answers
Q.What is VinFast's stated pricing strategy for its new models?
What is VinFast's stated pricing strategy for its new models?
VinFast has promised "high-end cars at reasonable prices" but has not yet revealed any concrete price range for its sedan and SUV models. The automaker is expected to debut the models next year.
Q.When are VinFast's sedan and SUV expected to be available for purchase?
When are VinFast's sedan and SUV expected to be available for purchase?
The two VinFast models, the sedan and SUV, are expected to hit the domestic market in Vietnam next year. Their debut at the Paris Motor Show has sparked speculation among customers.
Q.Why might a low pricing strategy be risky for VinFast?
Why might a low pricing strategy be risky for VinFast?
Bui Sinh warns that if market response to a low pricing strategy does not meet expectations, the company could be locked into covering losses for several years. This could affect future growth.
Q.What is the Japanese automaker director's suggested competitive price for the sedan and SUV?
What is the Japanese automaker director's suggested competitive price for the sedan and SUV?
The director believes reasonable prices should fall approximately below VND1 billion ($42,800) for the sedan and VND1.2 billion ($51,300) for the SUV. Product position is considered crucial for the brand.
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