After going public, the car manufacturer VinFast, which was still largely unknown in this country, was briefly worth more than the big brands in the USA. What is behind the manufacturer from Vietnam?
The Vietnamese car manufacturer VinFast, which has been little known in Europe up until now, has been worth more than the significantly larger top dogs General Motors and Ford after its US stock market debut. After a price increase to a good 37 dollars, the company had a market capitalization of around 85 billion dollars. Ford is currently worth almost $48 billion on the stock exchange, and General Motors is worth a good $46 billion.
VinFast is part of the Vingroup group of companies and was founded in 2017. The largest Vietnamese conglomerate in turn belongs to the richest man in Vietnam, Pham Nhat Vuong. He laid the foundation for his fortune by selling instant noodles in the former Soviet Union.
VinFast only started operations in 2019
For the first time, VinFast officially introduced three models to the Vietnamese market in 2019: the Lux A2.0 sedan, the Lux SA2.0 SUV and the Fadil city car. There were also three e-scooters. In 2021, the company launched two electric vehicles, the SUV VF 8 and VF 9, in addition to another electric car in Vietnam. The first examples of both models were finally delivered this year. According to its own statements, the carmaker had produced and sold around 19,000 cars worldwide by the end of June.
VinFast announced its plans for a US IPO in December and is the first Vietnamese company to go that route. Cars are to be sold in the USA from the end of the year. To this end, the group plans to build a plant in the state of North Carolina in 2025 for four billion dollars. The groundbreaking ceremony took place in July. In Europe, VinFast has already opened two stores, in Paris and in Cologne.
The successful IPO now supports “VinFast’s commitment to sustainable mobility around the world and at the same time opens up access to the international capital market,” explained company boss Le Thi Thu Thuy. She has been at the helm of VinFast since early 2022. Her predecessor was ex-Opel boss Michael Lohscheller, who, however, resigned from the post after just four months.
Not a classic IPO
Like many young car manufacturers before it, VinFast went to the New York Stock Exchange via a detour. Instead of a classic IPO, in which a company is examined more closely, the Vietnamese merged with an already listed company shell, a so-called Special Purpose Acquisition Company (SPAC). The share’s issue price was $22, rising to $35.06 during the trading day.
With regard to the market value, however, it should be noted that only a relatively small number of VinFast shares are traded, so that there can be strong price movements quickly. In after-hours trading, the papers ultimately fell again by more than twelve percent. In addition, VinFast is not yet profitable. Revenue fell 49 percent year over year in the first quarter. The company posted a net loss of $598 million. In 2022, the bottom line was a minus of 2.1 billion dollars.
Other new car companies had already achieved high stock market valuations that they could not necessarily maintain. Rivian, a maker of electric pickups, SUVs and vans, was valued at $150 billion in November 2021. It is now just under $20 billion after bottlenecks in the supply chain.