VinFast Switching To Dealer-Based Selling, But Are Dealers Interested?

Like many EV makers like Tesla, VinFast entered the market with a direct-to-consumer distribution model. While the approach does have its advantages - like preventing crazy dealership markups - the Vietnamese EV brand wants to change it up and start selling through dealers as well, according to Reuters.

The recent debut on the New York Stock Exchange saw VinFast valued at $85 million, putting the brand under the spotlight, including among dealers. Since then, the shares retreated and reportedly dropped 33.2% at Thursday's close.

Dealerships reportedly have a mix of caution and interest in how VinFast wants to distribute its EVs. One of the troubles the brand faces in North America is the lukewarm reception from the public, with automotive reviewers giving the VF 8, its first and sole offering at the moment, bland feedback.

"Is there room for more brands? Yeah, there probably is. It's just too early to tell," said George Glassman, president of Glassman Automotive Group, which sells five automotive brands outside Detroit. "I'd need to see more before I could make an intelligent decision."

To guarantee the quality of its products, VinFast has been offering a compensation program for defective VF 8 units. The program gives $100 for minor inconveniences, while significant issues result in a $300 compensation. A 10-year battery warranty and a 10-year/125,000-mile overall warranty are also part of the comprehensive aftersales programs prospective buyers can enjoy.

"If it's a good product and it's got a great warranty on it, Americans will buy it," said Rhett Ricart, CEO of Ricart Automotive Group in Colombus, Ohio, which sells 10 auto brands.

On top of that, more dealerships could be encouraged to distribute VinFast EVs as the automaker is committed to building a local assembly plant in North Carolina. This would address concerns among dealers, such as the distribution of parts for repair.

"The dealer has to be concerned with their (own) reputation," said Scott Fink, CEO of Fink Automotive Group, which owns VW and Subaru stores near Tampa, Florida. "If I sell a car to you and you can't get a fender, you're going to be pissed off at me. I'm not going to do that."

"The devil's in the details," he added.

VinFast CEO Le Thi Thu Thuy said opening their own stores is great, but it would take a lot of time. As such, the brand is looking to switch to a dealer-based strategy as "joining forces with other partners to go faster" has always been the brand's nature.