What always blows my mind is that Vietnam's richest man got rich making noodles in Ukraine[1].
Mivina instant noodles were a staple food for me as a kid. It was a very Ukrainian brand to me. I was telling my Vietnamese friend about these glorious noodles, and she told me "You know that it literally means 'Noodles From Vietnam' in Vietnamese, right?".
Turns out, Mivina is a brand of Phạm Nhật Vượng's, which grew out of his (not too successful) restaurant.
He grew the Mivina business instead, and eventually sold it to Nestle for $150M - and then 10X'd that with a resort/real estate business in Vietnam.
Samsung started off as a small trading store / company and later became a sugar refinery. Lotte (another Korean conglomerate) started off selling gum during wartime. Even Nike initially started off with Phil Knight simply being the importer for Japanese Onitsuka Tiger shoes.
This is why I think it makes total sense for good early stage investors to invest in people and teams (as opposed to the ideas). The category or industry they're operating in today is just a small taste of what they're capable of.
He has one advantage that past failed attempts didn't: electric cars are relatively simple compared to combustion engine cars.
But American consumers will want to see roughly 5 years of reliable quality reviews before they trust the brand. Problems with Yugos and early Hyundai's left a trail of memorable Internet memes.
So, what do you do the first 4 years? That's a lot of years to take a loss in order to gain market share.
Maybe start in the rental markets by loaning the cars out to rental shops. If they are loaned on a short-term basis, then the rental shops won't have to eat quality problems, if they appear.
One thing they have to know: if you foul up quality early, it takes a long time to recover that reputation. Detroit brands are still recovering from the clunkers they made in the 70's and 80's. They are now on par with the Japanese brands, but that's not good enough to get a clean reputation. Hyundai had to include generous extended warranties AND low prices to restore their reputation and market share.
Buy up a few parking lots in a few major metros and let people unlock the cars with an app on their phones as short term rentals.
The vehicles will probably end up as a loss, but it's going to get a lot of press. Then start selling them. Make the parking lots into car dealerships. Put them in college towns where people are just starting to get real jobs and have money to spend, and are also very online.
Do you mean sell the cars to students? It's same problem: they will probably prefer very used cars from known brands over slightly used cars from an unknown brand.
One advantage of selling people their first car is that they might be slightly less likely to have strong opinions on brands. Need every advantage you can get.
They're already selling their cars at a loss, according to the article. I'm sure there are plenty of people who would buy a Vietnamese electric car if it was 25-50% less than a Japanese/American/European one. Thats certainly how Korean cars managed to break into the US market.
This is clever, but I think you could get a similar result with fewer dedicated internal staff (better for a company with no US ops) by leasing or selling vehicles to e.g. ZipCar.
Detroit never stopped churning out clunkers. My neighbors brand new, $50k Chevy truck’s electrical is completely shot after first year. This is in mild Northern California weather.
It so bad, it's a running joke [1] I think low-end Fords (i.e. simple) are the only US car I'd consider and even then, their transmissions are suspect.
I think the broader point to note here is that it's relatively easy to build simple machines. It's hard to build reliable complex machines.
I would certainly trust a low end Ford Focus, more so than even a low end VW Golf / Skoda Scala.
As soon as you move into premium models both the American and European manufacturer start to show their weaknesses compared to the Lexus/Acura/Infiniti/etc brands from Japan.
> So, what do you do the first 4 years? That's a lot of years to take a loss in order to gain market share.
Hyundai addressed this by offering a ten year warranty. They could do that right out of the gate rather than waiting until they have a bad reputation first.
Another possibility is to start off with a big leasing program. People aren't too concerned about repair costs or resale values for leased vehicles.
Meme as in image macro with top and bottom text? I haven't either, but that's not what the word "meme" has meant until very recently. Meme as in "Hyundai/Yugo are terrible cars" repeated even by people who have never driven one? Very common back in the day before meme meant image macro.
FORD = Found On Road Dead (or Fix Or Repair Daily)
FIAT = Fix It Again Tony
JEEP = Just Empty Every Pocket
HYUNDAI = Hope You Understand Nothings Drivable And Inexpensive
They generally were jokes, some with images, some not. It seems every joke site at the time had at least one about Yugo's or Hyundai's. At least that's what I remember. This is roughly between 1995 and 2000. Some may have been on Compuserve instead of the Internet, I don't remember the details, but generally both copied each other.
> FORD = Found On Road Dead (or Fix Or Repair Daily)
Haha, just fixed my Ford in the driveway today! (Battery cable corroded to the point it wouldn't conduct anymore.) But the beast is 30 years old, so I forgive it.
In the same vein, my grandpa considered Toyotas to be "toys" ("they've even got 'toy' in the name) until he bought a Highlander and - eventually - a Prius.
> it takes a long time to recover that reputation. Detroit brands are still recovering from the clunkers they made in the 70's and 80's.
I would say that they are still recovering from the clunkers they made in the 2000s.
Detroit never really got into the quality mindset that the Japanese car makers became famous for. And they didn't get into the driving dynamics mindset of their European counterparts, except maybe a couple of Cadillac models starting with the CTS-V.
Never really recovered, did you see the recent article on the coverup over fiesta and focus transmissions at ford. Shit like this is why I don’t buy “American” (Mexican) cars
"American consumers will want to see roughly 5 years of reliable quality"
You say that as if it's gospel, but it sounds like "boomer thinking" to me. The demand for electric cars over the next ten years will mostly come form people who have different ways of making purchasing decisions than in decades past. And they've never heard of a Yugo.
I don’t think researching a $40k purchase and valuing reliability is “boomer thinking”. It’s a side effect of people getting married, buying homes, and starting families.
Yeah, lol. It's called adult thinking. And it happens once you actually become one. One that is responsible for others, not just yourself and your whims. "Adulting" for an hour a week to pay your bills doesn't count.
That might have been true once, but I suspect this small-sample history is now irrelevant due to shifting demographics. Only Boomers remember the Yugo. The rest of us are too busy trying to afford the privilege of commuting to really care where the car came from.
Why is this term suddenly popular, especially here?
I'm downvoting comments using it, since it seems to be disparaging at best, if not offensive. It's also used inaccurately. The Yugo wasn't even produced until 1980.
My sense of it is that most of these are Russian propagandists trying to sow dissent in America, and that's why the popularity of the phrase tends to peak for two months are so and then die off for six months before resurfacing.
You're close. I'm actually a shill for Reynolds Wrap. They want you to think it's Russia so that the surplus tinfoil from the holidays will all sell off. Then they deactivate us until cookout season comes around.
It is offensive, 100%. It's grouping and stereotyping people based on age, meaning that for example my parents are subject to it, despite growing up in communist Poland and not getting any economic benefits normally attributed to "boomers". At 28, I'm probably 10x "wealthier" than they were at my age, but of course they are "boomers" by age so fuck them for ruining the economy, right?
> but of course they are "boomers" by age so fuck them for ruining the economy, right?
If you're vicariously triggered by the word "boomer", it's because you have this attitude attached to it. As with the other commenter, I can't help you with words you're trying to put in my mouth.
It seems to have gained popularity among younger people as an insult against anyone perceived as older. I'm 39 and have been called a boomer by a teen of about 14 or 15 yo. I guess it morphed into an insult for anyone older than 30 nowadays.
Its a mix of 4chan and reddit memes, plus deliberate attempts by bad actors to provoke intra-cultural conflict to shape consensus and rally people to respective voting blocks.
There are strains of truth there -- life ain't grand for the millennial crowd -- but it's more of a meme than anything, IMO.
Also rather incongruous on HN, since there is a much stronger mid-career / older crowd on HN, aka the Slashdot refugees.
I don't remember Slashdot being quite this salty, but it's been long time. All I said was "Boomer" and suddenly everyone's acting like they just saw the fnords.
What a bizarre sentiment. If you can barely afford it you should care more. Get a reliable make and model that there are a lot of so the parts are cheap. Also, I’m not a Boomer and I remember Yugos.
The actual topic is reliability. Country-of-origin is a consideration in reliability. You can't just exclude the context of the original post.
You're trying to argue that "Boomers", which I took in good faith that you were not using as an epithet, are the only ones who would consider country-of-origin. That's, simply put, wrong.
> electric cars are relatively simple compared to combustion engine cars.
It's not really an advantage, though. Established makers have that same advantage, with the addition of having established dealer and service networks, established reputation, and so on.
I don't think the Vietnamese American will buy those cars.
They still think all successful business in Vietnam has some ties with the regime (which they hate a lot).
This business is even more problematic to them since the owner is a Northerner, he had started on Eastern Europe, and his father was a military officer.
Know a lot of Vietnamese folks around the Washington DC area. Like the Cubans, most of the Vietnamese in the US are here because the NVA military cause them to flee. A lot of them vote Republican and probably aren't crazy about a former NVA officer selling them anything.
Even if this fails spectacularly, if he really spends $2bn it could have an effect globally on increased demand/manufacturing, and lower prices in $ per kWh for good quality lithium ion batteries.
I may be wrong on this, but as I recall, Vietnam's domestic auto industry exists because they have escalating high tariffs on foreign manufactured cars with certain engine sizes (eg: 35% tariff on foreign made 4 cyl 1.6 L, 40% or more on 2.4L and larger engines, 50% tariff on things with 3.5 to 5L engines). Similar to China.
Currently EVs are not remotely price competitive with ICE cars. You can get a decent new ICE car for $15-20k. But even entry level EVs seem to be $35k+. Until new EVs reach the $20k price point, I do not anticipate them going mainstream. Perhaps a new entrant like VinFast will achieve this.
Battery capacity price in China is already below $100 per kwh.
EVs are simpler to engineer, have lesser parts, and supply chains for them are shorter.
At $5000-6000 per battery pack, the rest of the car will cost around $3000-4000 if you use super duper cheap Chinese steel.
More importantly, switch to electric will facilitate further physical downsizing of cars, and this will further increase the battery/payload mass ratio: EVs don't have to have engine compartment, nor structural tricks to contain heavy wobbly engine block, nor a need to provide a lot of rigidity for heavy mechanical components. A car with less "dead volumes" will of course be cheaper.
This way you may be getting 300km electric ranges even in reasonably cheap EVs in the future.
They may not quite be there on sticker price, but depending on the cost of power and gas, TCO is already solidly in the competitive range. People aren't buying just $15k cars, either - the Toyota Camry is the most popular model in the US, and it runs $25k-$35k new based on configured options.
By comparing to the Camry you're kind of supporting their point, though. The Camry is a mid-size gas car (by length), and its top trim is the same price as a bottom trim Model 3, a compact electric car. The accurate comparison would be to a Corolla, a compact ICE car whose top trim is about $28k.
In other words, current electric vehicles are about 2 price classes above equivalently positioned gas cars, maybe 1.5 price classes if you consider TCO.
Is there a reason why you're valuing performance at zero? 7.6 seconds 0-60 for that Camray, 8.0 for the Corolla. Surely some fraction of consumers care about that.
A new v6 camry will do 0-60 in 5.8, and once it gets going as much hp as a model 3. But no, most customers do not care about performance[0] otherwise trucks, SUVs, CUVs, etc. wouldn't be dominating American car sales.
Actually performance is exactly why SUVs came to dominate -- they're classified as trucks under CAFE which allows them to have worse fuel economy. Which allows them to have bigger engines.
That advantage mostly fell to hybrids and full electrics, because now you can make a fast car that satisfies the rules, but by that point the ship had already sailed and now people don't feel safe in a sporty little thing next to the neighbor's hausfrauenpanzer so now people want it to be fast and big.
I'm pretty sure that the minority of consumers who care about performance is much bigger than the % who are buying electric cars today. There's a lot more to the car market than the most popular thing.
Average price of a new car in the US is ~$36,718. Some consumers are taking on 6,7,8 year auto loans to pay $50k-$80k for vehicles.
It is not necessary for EVs to reach the price point you mention for adoption to take off, considering much lower fuel costs (total cost ownership). I know someone putting almost 2500 miles/month on their Model S commuting. The math worked out immediately for them to dump their Chevy SUV.
> Some consumers are taking on 6,7,8 year auto loans to pay $50k-$80k for vehicles
which is absolutely insane in my opinion, to have a shiny quickly depreciating status symbol. the amount of interest paid over the life of a 72-84 month loan is nuts. but people are short sighted and look at the monthly loan payment amount only. dealerships of course know this, and start naive people off in the negotiating with "how much do you want to pay a month?". they'll never show an amortization table.
What's wrong with taking an 8 year loan for an asset that you will possess and use every day of those 8 years? As long as the interest rate is good (less than 4%, say) it sounds like a prudent decision that frees up cash flow.
A car is not an asset, but a liability. It doesn't generate money, it costs money.
If your 8-year-car is going to make you substantially more money than a cheap car that maybe doesn't require you to take a loan, you have a point. But since cars are about to go from A to B and the status symbol itself doesn't pay for anything, a cheaper car would do.
Unless you consider the status utility worth paying for. Some people think it is. I think they're wrong, but who am I to say how they spend their money?
Why do people by expensive clothes that are no better than clothes a fraction of the cost?
There’s evidence that people make decisions about others based on their clothing, even when directly informed not to during studies, so it appears there might be some utility in more expensive clothing.
I'm with you. I bought my first car last year and while I had moved some money into my checking account and even got a few checks for the first time for the down payment, they offered me 0 down with 2.9% interest which I took without hesitation. At that rate, they are barely beating inflation and I just moved my money back into vanguard ETFs.
Eh, I think I'll keep my old Ford. Costs me about $500/year in maintenance/repairs. No comprehensive insurance. Car tabs are cheap because the state considers it worthless. I never worry about parking it on the street / at the airport.
The subsidies are per-manufacturer, for the first 200k units sold. As of June, only Tesla and GM have hit the phase-out threshold. Everyone else still has the full $7.5k credit available.
What's "mainstream" even mean? I suspect you'll find that it's a circular reference, and that people who can afford a $35k car think that it's a mainstream purchase.
If anything, it seems like there are already too many automakers.
For various reason I believe FCA, Nissan, Mitsubishi and Ford are going to fail.
I can't imagine any upstart without any compelling unfair advantage/killer product is going to fair well in an imploding auto market.
If he started this endeavor 8-10 years ago, he'd have an advantage. Now nearly every car maker is either producing or on the verge of producing at least one EV model.
Good riddance to FCA and Ford, though I honestly have a hard time seeing Ford fail completely given the success of their trucks in the US.
I'd be sad to see Nissan go.
I have no idea how Mitsubishi hangs on; they're just too small a player now. What they really should do is get out of the car business, and jump into the airliner business. The market is screaming for alternatives to Boeing and Airbus. Boeing has proven itself untrustworthy, and Airbus just doesn't have the production capacity to handle increased orders. On top of that, I'm sure ANA and JAL would love to buy domestically-made airliners if they could.
Of course, the US may sail in and prop those two up. Kind of a "Too political to fail" type thing. But on their own, absent help like that, yeah, I don't really see how they make it without some sort of market event. Failure, fire sale merger, etc.
>I can't imagine any upstart without any compelling unfair advantage/killer product is going to fair well
Vietnam doesn't really care too much about WTO rules, so they provide not only enormous resources to their firms through the back door, but also slap enormous tariffs on foreign auto dealers at the front door.
So yeah, what we may term unfair advantage, they call command capitalism.
The timing could be better, but you have to understand, it's hard to find anything to do with massive wealth in Vietnam. You either start a car company or you blow it on black market Rhino horn for your hangovers.
>Bayerische Rundfunk reports that Ocean Lotus (also known as APT32), a hacking group associated with the government of Vietnam, has been detected in the networks of BMW and Hyundai. Engadget calls it cyberespionage.
What differentiates one ICE car manufacturer from another? Already they're using the same basic engine design (and often the same engine) between brands. With ICE cars it comes down to aesthetics, passenger features, and marketing. No different than EV makers.
All of the above? Plus a lot of other things like styling, interior, infotainment, soundscape and sound dampening, dealership/repair network, and so on...
There’s nothing magical about electric cars that takes away all the hard parts of building a car. Look at all the maintenance issues Teslas have with falcon wing doors and so on to see the potential issues that can turn customers away even on an electric car. Just because you have an electric motor instead of an engine doesn’t mean you don’t have all the other parts of a car to deal with and tweak.
Electric cars typically have 1% the moving parts of an internal combustion engine vehicle. If the chassis is built well, you just need to swap out the motor and battery as needed, and flush the coolant every 5 years. There's no belts, chains, pumps etc for the most part to maintain or replace. The model X is pretty complex but if you look at the model 3 it's just a bunch of plug and play parts like a PC.
You could pretty much say the same thing about an ICE car though - plug and play standardized parts, ever since the Model T. I’ve owned my ICE for almost a decade and never needed to service the engine other than routine oil and filter changes.
There’s plenty of room for differentiation between electric cars, even the ones that already exist are plenty different. (Just like my ICE vehicle is different from other ICEs in many, many ways besides the engine)
I guess it depends on if we are talking about enthusiasts or the average consumer? If we are talking about the average consumer I would assume in order of importance; Reliability, vehicle range, charging time, ride quality, available technology, interior quality.
For the average "enthusiasts" seen in the comments section of Car and Driver's facebook page it would be more along the lines of; 0 to 60mph time, nurburgring lap times, 0 to 100mph times, quarter mile times, looks. But for actual enthusiasts who have an interest in Electric Vehicles i would say all the things you mentioned are fairly important. But really, to the average consumer who purchases something like a Camry or Accord, I feel as if reliability/range/technology (by that i mean things like apple car play, lane assist, and other QoL technologies) and value are really what the average person is looking for.
> If we are talking about the average consumer I would assume in order of importance; Reliability, vehicle range, charging time, ride quality, available technology, interior quality.
You're paying for the support, trust, goodwill and culture of the brand and the particular product. PR is the conveyor belt/crafter of those ideas, it's up to how they treat you that matters.
And, if you have a problem with a new or used vehicle, call Steve Lehto, a hilarious Lemon Law lawyer I watch on YT.
I want to turn my car on over the internet from my phone and heat it up 15 min before I leave the office two blocks away. Then I want to put it in autopilot for the mind-numbing straightforward freeway traffic on my commute.
I don't care what other car manufacturers have to offer if they can't do the above. And as long as it's under $60k I don't care what the price is either.
You can try to figure out why the current market leader in various markets is preferred: Tesla (high end), Leaf (lower end non-China), and whoever is leading in China.
If you go by HN discussions, you'll quickly find out that Tesla makes terrible cars and has no special technology, so you might want to try a non-HN source of data :-D
Meh, everyone knows how to do marketing. But differentiation itself is an important part of successful marketing in a crowded market. So the better answer may be, brands differentiate themselves in exterior and interior design and not much else.
I got to wonder how well these guys understand the us market. Low end us consumer are so deep underwater in their old car that you would need to buy them out to even allow them to switch brands.
I think if you are breaking into the car market at the low end you have to offer a total lifestyle package. Maybe a very long term lease with full maintenance program package or some other Mechanism that allows people that have no spare cash to continue operating a vehicle for a long time and build a reputation for reliability.
That being said the low end is kind of a trap because you get stuck as a low end brand (Hyundai) and in the USA you need a dealer network but a low end dealer won’t be able to sell high end due to bad dealership environment.
“Since the mid-1980s, through the Doi Moi reform period Vietnam has made a shift from a highly centralized command economy to a mixed economy that uses both directive and indicative planning through five-year plans.”
Romania has moved over from communism to a crime centric country - the culture and everything is dominated by it, so the only “billionaires” are dodgy people with a shady past. Went from communism to kleptocracy, rather than democracy.
I know, i am from the country. Came back after years of living abroad only to find a big fat deception, a culture of crime and corruption, cheap nationalism, conspiracy theories in every aspect of life, pseudo sciences, incompetence at all levels and lame “pride”. Naturally there is a handful of great people but too few to make a difference. I for one cant wait to get out of here. Oh and that german president apparently has a criminal history of buying properties illegally (he apparently lost a case in this regard), but is better than the other candidate.
Really it comes down to Big-C "Communist" vs little-c "communist". Soviet Russia was little-c "communist" in that you weren't allowed to make much money and if you made a lot you weren't allowed to spend it, so everyone had exactly the same things and quality of things.
More modern "communist" countries are Big-C Communist, more correctly titled Capitalist Authoritarianism. You can have as much of anything as you want, as long as you're loyal to the government and agree that the government can take everything you own any time they want. Including your business or your billions of dollars.
China has hundreds of billionaires even though they're "Communist" because they're not actually communist, they're Authoritarian Capitalist.
It's pretty disappointing. The Vietnamese communist party defends the Doi Moi reforms as using capitalism controlled by the people's state as a phase to increase production in the economy. This is something understandable as socialism can't be built on an insufficient industrial base and capitalism provides individual incentives to jump start it and a door for foreign investment from capitalist countries. However, other leftists critique this as revisionist and a failure of existing Marxist-Leninist models* which do not appear to incorporate true worker control of the economy.
Once you introduce capitalism without proper checks on the bureaucracy, it takes on a life of its own as the newly created capitalist class begins to advocate for itself at the expense of the people and the bureaucrats begin to see themselves as the rightful heirs of private wealth. This is one analysis I read of what happened in China.
I'm not sure who to believe, but introducing elements of capitalism is on its face a dangerous move for the Vietnamese revolution. Honestly, I'm shocked that they've let it go so far they have a billionaire. I hope they have things actually under control because they fought and bled for decades to eject imperial influences from France and America and to ensure the people control their own fate.
I'm sure a politically active Vietnamese person would have a different take than me (and certainly a multitude of takes), given they understand their circumstances better than a dabbler foreigner like myself.
* I say existing because the Soviet Union briefly attained this, but the leadership shut down the workers councils (which many saw as a betrayal). So this idea isn't necessarily inimical to Marxism-Leninism, but in practice only a sparse number of examples have been realized.
Wow, this is a $2B mistake. Funny thing about very wealthy people, they think because they had success in one area that it will translate to success in another. Most likely their timing and luck were perfect early in their career. I don't think timing is on his side here.
Those are the exact same comments as people had on Tesla roughly 8 years back. There even was a whole website dedicated on the Tesla 'death clock', predicting when they would go bankrupt.
Jury is still out in Tesla, I suspect they will still go BK at some point and that’s probably the best thing that could happen to the car imo. They could take the best stuff and shed some of the debt and musk issues
This guy is not an ordinary walthy people who think he can success in one area so he can translate it to another. He actually succeed in way a lot area before jumping to auto making. I can't predict the result of this move but I'd say, he not that type of wealthy people.
Vingroup is a classic Asian conglomerate that is already varyingly successful in half a dozen fields ranging from retail to real estate and hospitals. The key challenge is whether they can make money outside their home market of Vietnam.
Mivina instant noodles were a staple food for me as a kid. It was a very Ukrainian brand to me. I was telling my Vietnamese friend about these glorious noodles, and she told me "You know that it literally means 'Noodles From Vietnam' in Vietnamese, right?".
Turns out, Mivina is a brand of Phạm Nhật Vượng's, which grew out of his (not too successful) restaurant.
He grew the Mivina business instead, and eventually sold it to Nestle for $150M - and then 10X'd that with a resort/real estate business in Vietnam.
A pity he didn't stay in Kharkiv, I say.
[1]https://en.wikipedia.org/wiki/Ph%E1%BA%A1m_Nh%E1%BA%ADt_V%C6...