Vingroup, Vietnam’s biggest private company, is leaning heavily on its own staff to buy or lease its newly launched cars, electric scooters and mobile phones as the real estate group pursues a bold push into heavy industry. Financial Times reports.
Senior managers’ bonuses are under threat if too few of their team members buy VinFast vehicles, while all staff must switch to the company’s Vsmart phones, according to leaked internal emails confirmed to the Financial Times by two employees.
Meanwhile, workers said VinFast would soon be the only brand of car permitted to park at company premises.
Vingroup has expanded over the past decade from its core business of real estate and resorts into retail, healthcare, education and other sectors, defying sceptics by building viable businesses.
However, analysts have raised questions over the car project because of its cost, the past struggles of other “national” carmakers such as Malaysia’s Proton, and doubts about how many consumers will be ready to choose Vietnamese cars over similarly priced imported ones.
In a memo to staff in June, Vingroup chairman Pham Nhat Vuong, the country’s richest man, set a December 1 deadline for all staff to be using the Vsmart phones that the company launched late last year. New joiners must switch to them within two months of signing their contract.
In a subsequent memo, another Vingroup executive complained that only 8 per cent of staff had bought VinFast vehicles and warned senior managers that they would have their bonuses withheld if they failed to boost this to at least 30 per cent. Some staff had part of their bonuses withheld from last month’s pay, according to one of the employees.
Staff also told the FT that Vingroup would from later this year ban all cars and motorbikes other than VinFasts from its corporate car parks.
“There are employees who are afraid of being forced to quit, so they are forced to buy,” said one worker.
Even as Vingroup presses employees to buy more of its products, the company has cracked down on abuse of its staff discounts, and informed staff it had sacked six people for trying to sell VinFasts online that had been bought through the scheme.
Vingroup did not reply to requests for comment.
Vingroup launched VinFast in June with the Fadil, a small hatchback based on the Opel Karl that was initially priced at about $17,000. The country’s first “national car” brand, it recently began sales of the Lux A2.0 and SA2.0, two pricier models based on BMW technology.
Vingroup builds its cars and scooters at a factory near Haiphong, a project for which it has earmarked up to $3.5bn. The group began selling its Vsmart brand phones in December.
Titikorn Lertsirirungsun, Asean regional manager at LMC Automotive in Bangkok, said that while VinFast would benefit from Vietnam’s “robust market and lower car density”, the fledgling brand’s challenges included “how to create consumer confidence in product quality and aftersales service”.
Vingroup has not released sales figures for the new cars but said ahead of the launch that 10,000 people had pre-ordered them. VinFast is not a member of the Vietnam Automobile Manufacturers’ Association, which reports monthly vehicle sales by manufacturer.
Just over 320,000 light vehicles were sold in Vietnam last year, according to LMC. The Haiphong factory’s initial production capacity of 250,000 cars is set to double in a second phase.
Vietnam’s Communist leadership wants to build “national champion” companies in a country that borders on China, Asia’s economic powerhouse, and where many of the largest manufacturers are foreign investors.
By John Reed.