Blocking Chinese Companies, Crushing Japan and South Korea: How Did Vietnam's VinFast Rise?

To begin with, calling VinFast the "Vietnamese BYD" is clearly an exaggeration, as there is no comparison between VinFast and BYD in terms of supply chain self-sufficiency or sales volume. However, if focusing on the Vietnamese market, looking solely at VinFast's growth speed after its start and its current dominant position, its achievements in the local market are no less than those of BYD.

This is why we have selected VinFast as the main focus today.

What is Vietnam's VinFast?

VinFast is an electric vehicle company under Vietnam's largest private enterprise, Vingroup. Founded in 2017, it is the first independent car brand in Vietnamese history.

Through buying technology and assembling fuel vehicles, it completed its initial three-year start. Later, in 2022, it fully transitioned to pure electric. In 2023, it listed on Nasdaq. Starting from 2024, it surpassed overseas brands like Toyota and Hyundai to become the sales champion in Vietnam's local market. In 2025, it delivered nearly 197,000 vehicles, accounting for approximately 36% of the Vietnamese automotive market.

In the first seven months of this year, VinFast's sales increased by 74% year-on-year again, reaching 138,000 units. Its growth rate was the highest among all local mainstream brands. Its sales volume was greater than the combined total of several overseas brands such as Toyota, Kia, Hyundai, and Mitsubishi. Furthermore, almost all of VinFast's sales were fully electric models. With this single brand, Vietnam's pure electric vehicle penetration rate has leaped into the top tier globally.

However, behind VinFast's dazzling halo lies a huge shadow — within three years of listing, VinFast's cumulative losses exceeded $9 billion, with a net loss of $3.87 billion in 2025. In May this year, VinFast launched its largest restructuring, spinning off its local manufacturing business in Vietnam to the founder's related consortium for about $530 million. The listed company shifted to an asset-light model while setting a goal to achieve profitability by 2027.

In the process of VinFast's rise, Chinese batteries, Chinese components, and Chinese production line equipment played a far more important role than public perception. At the same time, Chinese complete vehicle brands sweeping the Southeast Asian market are the only ones struggling in Vietnam.

What kind of market is the Vietnam孕育ing VinFast?

The Vietnamese car market around the birth of VinFast had several distinct characteristics:

First, the market size is small. Annual sales are about 300,000 units, less than one-third of Thailand and one percent of China, almost ignorable on the global map;

Second, all are outsiders. The market is dominated by Toyota, Hyundai, Honda, Kia, and Mitsubishi, exclusively foreign brands, with no local carmakers;

Third, there is no high-end manufacturing. All factories are in CKD/SKD assembly form, importing CKD parts for local assembly. Local supply chains only stay at low-end parts, with no whole-vehicle R&D capability whatsoever;

Fourth, two-wheelers reign supreme. The fleet of motorcycles in Vietnam is about 60 million. For ordinary families, the first motorized vehicle is always a motorcycle, while cars remain luxury goods.

For overseas car companies, the Vietnamese market was once a haven for tax-avoidance assembly. With high整车 import tariffs, foreign brands formed joint ventures with local conglomerates to build assembly plants, assembling imported parts into complete vehicles and selling them to a small group of the wealthy. Vietnam provided labor, land, and market, while core technologies, brand premiums, and major profits all flowed out.

However, the demand shape of Vietnamese consumers is brewing a huge change. With per capita GDP approaching $2,500 and the middle class expanding rapidly, motorcycle-owning families universally have the idea of upgrading to four-wheeled vehicles. An annual increase market with nearly blank stock is thus exposed within the comfort zone of foreign brands.

VinFast founder Pham Nhat Vuong seized this opportunity. This richest man in Vietnam earned his first pot of gold in his early years by selling instant noodles in Ukraine. After returning home, he founded Vingroup, expanding his business to real estate, retail, hotels, hospitals, schools, and other fields, becoming Vietnam's largest private enterprise group.

His business logic is "if Vietnam lacks something, Vingroup will fill it". In 2017, what Vietnam lacked most was its own car brand. At that time, the Vietnamese government was vigorously promoting industrialization upgrades, desiring a national industrial card. Pham Nhat Vuong entering the market at this time stepped on national will, so from day one, VinFast carried the color of a national project.

How did the experience-less VinFast start rapidly?

VinFast had no car manufacturing experience. Forward R&D was not a viable option. Its method was simple and rough: spend heavily to purchase mature technology, gather global suppliers, and use capital to compress time.

In terms of production lines, it took over the production line and team of General Motors Vietnam (Hanoi plant), rebranded Chevrolet Spark to launch its first model, Fadil;

In terms of platforms, it purchased chassis and powertrain technology from the previous generation BMW 5 Series (F10) and X5 (F15) to develop sedan LUX A2.0 and SUV LUX SA2.0, with Magna Steyr responsible for engineering development and Italian Pininfarina responsible for exterior design;

In terms of speed, in September 2017, it laid the foundation for the factory on Cat Hai Island, Hai Phong City. It took only 21 months to complete construction and put it into production. This is a modern complete vehicle factory with a welding automation rate of about 90%.

In October 2018, VinFast completed its global premiere at the Paris Motor Show. In 2019, three fuel vehicles were launched, entering the top five in Vietnam sales that year. From establishment to mass production delivery, VinFast took only a little over two years. After seeing the breakthrough difficulties of traditional fuel vehicles and the huge potential of the new energy market, VinFast made a decisive electrification shift in 2022.

What kind of cars is VinFast selling?

VinFast's sales explosion truly started after the shift to electrification. Before discussing products specifically, let's first break down VinFast's basic vehicle building philosophy.

First, electrification one step done — skipping hybrids, full series pure electric (BEV), betting that emerging markets like Vietnam can skip the legacy fuel vehicle stock burden and go directly electric.

Second, full price range coverage. From micro cars like VF 3 equivalent to over 50,000 RMB, to the 300,000 RMB tier VF 9, to the ultra-luxury sub-brand Lac Hong (800S/900S) launched in 2026, filling every niche market with a "sea of cars".

Finally, by using battery leasing/subscription, free charging, and long-term warranties, it brought the usage cost of electric vehicles significantly lower than fuel vehicles, dissolving the residual value anxiety of emerging markets for electric vehicles.

Based on the above product philosophy, VinFast's product line was precisely positioned in every niche market.

At the entry level, there is an A00 class micro box SUV named VF 3. In 2025, it won Vietnam's annual sales champion with 44,585 units, becoming the first car for young Vietnamese people. Following closely was the VF 5, positioned as an A class subcompact SUV, selling 43,913 units last year, the absolute main force in the entry-level family market.

In the mainstream price range, there is the Limo Green adopting a 7-seat layout targeting the commercial operation market. It became a hit when launched in August 2025, selling 27,000 units that year. The Herio Green, specializing in taxi and ride-hailing scenarios, contributed 12,600 units. Targeting home upgrade needs are the B class SUV VF 6 and C class SUV VF 7, with sales of 23,000 and over 9,600 units respectively last year.

Going up in price, there are the VF 8 and VF 9, positioned as SUVs above C class. They target markets like North America and Europe, bearing the brand's face.

Aside from four-wheel passenger cars, VinFast is also the largest electric two-wheeler brand in Vietnam. This business will not be discussed further.

Why can VinFast cars sell well?

Spreading the product line is not difficult, but in a market where overseas brands have deep roots, what exactly did VinFast's products rely on to become hits?

Let's look at the entry-level VF 3 first. This is the "national box" with full emotional value, adopting a rugged cute route. Square outline, unpainted black bumpers and wheel arches, two-door styling. It looks like a scaled-down Suzuki Jimny and resembles the Baojun Yunye in the domestic market. With 9 body colors plus paid custom colors, it is clearly going for "social media sharing".

The interior is minimalist, with a 10-inch screen as the focus. At only 3.11 meters in length, it has an 18.64 kWh LFP battery, with a range of about 210 km (NEDC). Fast charging from 10% to 70% takes 36 minutes. Such product power would be unremarkable in China, but in Vietnam, it precisely hit the largest group of people — young people and small families who commute on motorcycles every day. The price is not much different from high-end motorcycles, yet it provides shelter from wind and rain and shows personality.

The VF 5, bearing the sales pillar, adopts the family's new generation "Flying Bird" V-shaped DRLs. The appearance styling is rounded and friendly, the interior focuses on a refreshing tech feel, with a floating center console, simplified buttons, and a wide field of view.

With a 37.23 kWh battery, 100 kW front motor, and 182 mm ground clearance (tuned for Vietnamese waterlogging and poor roads), 10%–70% fast charging takes about 30 minutes. Space, range, and price achieve a balance that fuel cars in the same price range cannot offer simultaneously, matching the mainstream budget of first-time buying Vietnamese families.

Further up are the VF 6 and VF 7, with styling designed by Italian Torino Design. VF 6 is rounded and vivid, VF 7 has sharp edges. The interior centers on a 12.9-inch center console screen plus HUD. The full series has L2-level driver assistance. The above cabin configurations in Vietnam are basically still empty in joint venture fuel cars at the same price range.

The VF 7 has a motor power of 174 hp, a 59.6 kWh battery pack, and nearly 500 km range. It also has 349 hp dual-motor four-wheel drive with a 75.6 kWh large battery. This model's configuration in power and intelligence allows Vietnamese consumers to personally feel the generational gap between new energy and fuel vehicles in experience.

As for the VF 8 and VF 9 targeting overseas markets, both cars' designs are out of Pininfarina. VF 8 takes a "sporty elegant" route, while VF 9 is a 5.14-meter three-row flagship. Specific product power will not be discussed in detail, but one thing is they took a hit in reputation in the US, with US media even sharply criticizing VF 8 as "the worst car ever reviewed".

The above are the weapons VinFast uses to dominate Vietnam. Placing these products in China, they basically have no competitiveness. But in relatively closed Vietnam, each model basically achieves "unrivaled at the same price" — entry-level market eats up motorcycle upgrading groups; mainstream price level eats up passenger car first-time buying families; going up, uses intelligent configuration to out-flank joint ventures. This layered precise strike allows VinFast to gain an unprecedented sales explosion.

Why did Chinese car brands sweeping Southeast Asia fall silent in Vietnam?

Honestly, VinFast's current products cannot get any advantage over any mid-range and above Chinese new energy car company. But ironically, in Vietnam where new energy vehicle penetration rate has exceeded 40%, there is almost no presence of Chinese passenger car brands. Behind this is far from purely market competition.

First, the Vietnamese local champion has the best start. Chinese new energy brands entered the Vietnamese market around 2024, by which time VinFast had already completed the density monopoly of channels, charging networks, and after-sales networks, and locked down the mainstream price range with VF 3/VF 5. This weapon of cost-performance ratio, most good at by Chinese brands, collided exactly with the barrel of VinFast's guns.

Second, in terms of tariffs and policies, non-ASEAN complete vehicle import tariffs are about 15%. The EV exemption registration fee policy treats Chinese and foreign brands equally, but the Vietnamese government's industrial intent is to support VinFast, this local champion, not to make a dress for Chinese brands.

Additionally, there are consumer trust and national sentiment issues. The historical entanglements of China-Vietnam relations make Vietnamese consumers hold extra scrutiny towards Chinese brands. The stereotype of "cheap but unreliable" has not been reversed, while VinFast as a local brand has natural advantages in emotion.

So next, do Chinese car companies still have survival space in Vietnam? Or changing angle, do Chinese car companies need to strive to conquer Vietnam?

For some car companies, this willingness has already converted into practical action: BYD has announced building a factory in Phu Tho Province, Chery has implemented joint venture assembly projects, and Great Wall is planning local assembly plants. The Vietnamese layout of Chinese top players has shifted from complete vehicle exports to localization.

However, Chinese car companies' willingness to develop the Vietnamese market is not strong. Vietnam is the fastest growing and most radical electrification market in Southeast Asia. Absence means giving up a corner of the regional map, but its annual sales volume of 600,000 units is only about 60% of Thailand's, and it is occupied by local champions, so ROI is far lower than other markets like Indonesia, Philippines, etc.

Of course, from another angle, the Chinese industry chain has actually become an indispensable foundation for VinFast. It's just the sales champion title has no Chinese company's name. The absence of complete vehicle brands in Vietnam, in a sense, also symbolizes that China's electric supply chain is already strong enough to support the emergence of a local champion to keep the gate for itself.

Third-party observation summary

For over a hundred years, the automotive industry club has only accepted a few types of members: the US and Europe establishing technical barriers in advance, Japan and South Korea counterattacking with lean and systems, and China overtaking by electrification lane change. Historically, almost no country succeeded in squeezing into this table as a latecomer.

And now VinFast has provided a sample for the fourth path: using real estate capital to buy out time, using the Chinese supply chain to complete the trunk, using national will to rewrite policies, using ecosystem loops to secure the market. In eight years, the Vietnamese market known as the global top tier for pure electric penetration, from a blank local industry, to leaving Toyota and Hyundai behind.

Standing at a higher place to look, every step of VinFast's rise cannot be separated from the support of China's new energy industry chain. VinFast found the path suitable for its development, and for enterprises in China's automotive industry chain, hiding behind the scenes and indirectly occupying the local market is also a path to going global.

(END)