Download Vinfast Porter’s Five Forces model and more Study Guides, Projects, Research Strategic Management in PDF only on Docsity!
Industry Analysis Rivalry among competition firms Entering the automobile manufacturing market since 2017 and focusing on mid-range car products, VinFast can be considered a latecomer compared to other industry players. Consequently, the pressure to compete with rivals in the industry is significant. VinFast will face numerous competing brands in the mid-range car market, such as Honda, Toyota, Hyundai, Mitsubishi, Kia, and Ford, all of which are well-established brands with extensive experience, large scale, and high brand recognition. In the Vietnamese market, having a high competitive advantage translates to gaining a large market share. Specifically, in the affordable car segment, VinFast's flagship model, Fadil, priced between 414 - 490 million VND, will directly compete with two Korean models assembled in Vietnam, the Hyundai Grand i10 and Kia Morning, with the Hyundai Grand i10 being one of the most popular models in the market. In the large-sized SUV segment, VinFast's LuxSA2.0 (priced from 1. billion to 1.8 billion VND) is causing a sensation in the market, competing with similar products such as the Honda CR-V, Toyota Fortuner, Hyundai Santa Fe, and Kia Sorento. Apart from its car product line, VinFast's electric motorcycle line also faces fierce competition, especially from brands from South Korea (MBI) and China (Yadea). The South Korean brand MBI offers three electric scooter models - MBI X, MBI S, and MBI V - priced relatively high from 39.8 to 59.5 million VND. However, due to their appealing design and integration of various technologies and features, they pose a formidable challenge to VinFast. Additionally, there are electric scooter models from Yadea, a brand from Hong Kong (China), appearing in the Vietnamese electric scooter market with various price segments, competing with VinFast Klara.
Overall, in the Vietnamese market, comparing VinFast with long-standing competitors, it is evident that VinFast is not inferior, as it has introduced numerous vehicle models across all segments, offers many incentives for purchasing and after-sales customer care, and has a widespread network of showrooms and electric motorcycle dealerships nationwide. In the U.S. market, one of the largest automobile markets in the world, VinFast will have to compete with major names in the industry, such as Porsche, Tesla, Lucid, and Mercedes, as well as competitors with similar segments and price ranges, such as Volkswagen and Audi. Specifically, VinFast's two large-sized SUVs for the U.S. market, VF8, and VF9, will compete with several counterparts in the same segment, such as the Audi Q4 e-tron, Hyundai Ioniq 5, Volvo, and Volkswagen, with prices ranging from 40,000 to 60,000 USD. Competing with VinFast VF9 (priced from 83,000 USD to 91,000 USD) is the Tesla Model X - the highest-end SUV model from the company with a starting price of 94,990 USD. Overall, penetrating such a demanding market as the U.S. will pose many challenges for a new electric car manufacturer to gain market share. Bargaining Power of Suppliers In Vietnam, suppliers are organizations or individuals involved in providing goods, raw materials, and services for the production and operation activities of enterprises. Suppliers can exert pressure on businesses in various ways, such as increasing input prices, reducing the quality of goods, delivering incorrect quantities, and delays in delivery. These actions affect prices, output quality, profit reduction, and the competitiveness of the enterprise. In the Vietnamese automotive industry, VinFast does not face significant pressure from suppliers because the market demand is not too large and the capacity of suppliers is very good. VinFast has relationships with about 620 other suppliers worldwide. VinFast's manufacturing activities in
journeys. VinFast electric car models such as VF e34, VF 8, and VF 9 are all equipped with charging ports capable of recharging at public charging stations with super fast chargers with a capacity of 250kW, charging times ranging from 18 to 26 minutes (10 - 70% battery capacity). It can be said that in the electric vehicle market in Vietnam, consumers are less likely to switch as VinFast electric car models are competitively priced, have high-quality products that have been tested, come with many advantages such as a 5-year warranty, 24/7 emergency assistance, and an advantage in battery change policies. In the electric car market in the United States, consumers have more than one option, such as Tesla - a leading company in the electric car movement, and electric car models from domestic brands like Chevrolet or Ford, as these models share many similarities in terms of design, size, battery capacity, and speed. If VinFast does not offer a suitable pricing strategy, consumers will choose Tesla, which is considered leading in technology with software and automation capabilities. Overall, VinFast has an advantage in negotiating with buyers. The threat of Substitutes for products The electric motorcycles and cars from VinFast do not face a serious threat to alternative products considered in the current state of transportation in Vietnam. Some alternative products that could be mentioned are gasoline-powered vehicles, buses, and bicycles, which are the three main types of road vehicles used by people for daily commuting. Gasoline-powered vehicles are the most common means of transportation in Vietnam today. However, as the electric vehicle industry develops and becomes more widespread, the potential of electric cars in reducing CO2 emissions is very clear, as on average, electric vehicles are nearly three times "greener" than diesel and gasoline-powered cars. In addition to being environmentally friendly, using electric cars is also more "economical" compared to gasoline
cars. Specifically, electric cars do not require oil changes, have no mechanical parts that can break down, no exhaust systems and the lifespan of other parts such as brakes can be extended, reducing the need for frequent maintenance. Using electric motorcycles helps save fuel and maintenance costs because they use cheaper electricity instead of gasoline. The number of bicycles participating in traffic in Vietnam is very small, mainly used for exercise or short-distance travel. Vietnam's bus system is generally developing both in terms of quantity and quality, as a series of new buses are put into operation and additional bus routes are expanded to meet the transportation needs of the people. Along with the cheap fare, people do not have to worry about the cost. However, buses still haven't attracted as many passengers as expected. Threat of New Entrants 2022 was assessed as a turbulent year for the global automobile and motorcycle market due to the erratic changes in oil prices. This directly impacted the consumer demand for electric motorcycles. Therefore, the electric motorcycle market from 2023 onwards will see many dynamic developments with the entry of several new manufacturers. In Vietnam, it's difficult for any company to have the financial capability like VinGroup to establish a brand similar to VinFast. The new competitors of the company are foreign enterprises. Specifically, TMT Motors introduced the HongGuang Mini EV – a mini electric car – to Vietnam, attracting significant attention. This model is priced at 239-285 million VND, the cheapest in the current market. Dat Bike Weaver 200 is a product of a startup in the electric motorcycle sector in Vietnam. This model was launched in early April 2022 with a price of nearly 55 million VND. Dat Bike Weaver 200 has a classic design style, with a rugged and playful appearance. Overall, the pressure from the threat of new brands and models entering the electric vehicle market in Vietnam for VinFast
