World’s Latest Automotive Manufacturer Comes out of Vietnam
Roopinder Tara posted on September 24, 2019 |

VinFast LUX SA2.0. That it looks like a BMW’s SUV is no accident. The company licenses molds, engine and “technology” from BMW. (Picture courtesy of Siemens.)
VinFast LUX SA2.0. That it looks like a BMW’s SUV is no accident. The company licenses molds, engine and “technology” from BMW. (Picture courtesy of Siemens.)

Vietnam wants to enter big time manufacturing in a big way – and is in a hurry to do it. In the north of this mostly agrarian country, near the beautiful Ha Long Bay, a UNESCO World Heritage site, will rise a high-tech, ultra modern, robot stocked assembly plant -- quite literally from the sea. From its assembly lines will roll luxury cars and SUVs for the country’s elite and electric motorbikes for the locals.

Entrance to VinFast manufacturing plant, much of it on land reclaimed from the Bay of Tonkin, Vietnam. (Picture courtesy of VinFast.)
Entrance to VinFast manufacturing plant, much of it on land reclaimed from the Bay of Tonkin, Vietnam. (Picture courtesy of VinFast.)

VinFast aims to be the biggest automaker in SE Asia, says David Lyon, director of design of VinFast, at the recent Siemens Analyst and Media Event 2019, recently held in New York city.

David Lyon, 14 years in charge of design at GM, was called on to create an “aspirational” auto for VinFast. (Picture courtesy of Wikipedia.)
David Lyon, 14 years in charge of design at GM, was called on to create an “aspirational” auto for VinFast. (Picture courtesy of Wikipedia.)

In its rush, VinFast will not attempt to reboot the country from farm to factory. Instead it is outsourced many of its parts and technology. The company is getting its engine from BMW and looks like quite a bit of sheet metal tooling, too. The nose and tail, as well as the interior appointments, come from Italy’s fabled design studios, Pinafarina, Torino Design, Zagato and Italdesign. The resulting vehicles are mostly German engineered BMW SUV and sedans dressed up in a nice suit, size 5 series. VinFast puts a very prominent and bright “V” in LEDS on the hood.

We’re here. VinFast introduces itself to the world at the Paris Motor Show and pulls out all the stops. Autos shows always employ models but VinFast has Miss Vietnam, TrầnTiểuVy. Retired footballer David Beckham, adds to the star appeal. (Picture courtesy of VinFast.)
We’re here. VinFast introduces itself to the world at the Paris Motor Show and pulls out all the stops. Autos shows always employ models but VinFast has Miss Vietnam, TrầnTiểuVy. Retired footballer David Beckham, adds to the star appeal. (Picture courtesy of VinFast.)

The Siemens Connection

Lyon thanks Siemens for their software. They helped us do what two years ago what anybody would have said was impossible.

One might wonder why anyone want to get into the automotive industry? Lyon get that a lot. That might be a polite way to ask why a Vietnamese company with zero automotive industry experience could hope to be successful. Vietnam is not a place Westerners associate with making cars on a large scale, an industry associated with the international industrial elite nations.

The answer points to one man, says Lyon.

Vietnam’s Rich and Famous

Vietnam's richest man, PhạmNhậtVượng, wants his country to make cars for not just his country, but for Southeast Asia. (Picture courtesy of Forbes Vietnam.)
Vietnam's richest man, PhạmNhậtVượng, wants his country to make cars for not just his country, but for Southeast Asia. (Picture courtesy of Forbes Vietnam.)

PhạmNhậtVượng, Vietnam’s first US dollar billionaire, after success in real estate and retail, aims to not only make the first Vietnamese car but damn good ones. To fulfill his mission, he has practically willed a new car plant to rise from the ocean, construction finishing in record time. The entire plant was done in an astonishing 21 months.

If anyone can make Vietnam into an automaker, it will be PhạmNhậtVượng, chairman of Vingroup. With his immense wealth, he has almost single handedly shown he can elevate Vin as a brand – at least in his own country. The Vin brand has made itself a standard for luxury homes (VinHomes), stores and schools (VinSchools), hotels and resorts (VinPearl), and more. With each, the goal was to introduce to Vietnam products that measure up to international luxury standards, not those of their native country.

The billionaire NhậtVượng is fully aware he is making luxury vehicles that few in his country can afford, calling them “aspirational.” The SUV is estimate to be priced at around 1.4 million dong, the equivalent of $59,000 US. It is an odd offering in a country with a socialist government with a mostly agrarian population that makes an average annual income of about $150 a month. However, the elite in the cites may certainly be the target market and the two big cities of Vietnam, Ho Chi Minh City and Hanoi, both over 7 million inhabitants, could have enough of them to keep VinFast in business.

The models are due to be rolling off the assembly lines by the end of 2019.

But will Vietnamese dollar millionaires continue to buy their Bentleys and Mercedes? VinFast is counting on newly minted millionaires to have sufficient national pride to buy local. When they asked people in Vietnam to vote to what would be the final design of the vehicles, over 60,000 people took part, which VinFast points to as crowd support on a national scale. The Vin brand, in gold, doe seem revered from what we saw at Lyon’s presentation.

But the domestic market is only a step one. Per PhạmNhậtVượng and his ardent followers and employees, the international market is only islands away.

Here is Paul Lyon’s story of VinFast, from the keynote stage at the Siemens event.

NhậtVượng made his first fortune with an instant soup company in Ukraine that sold to Nestle for $40 million. He took that money went back to Vietnam and created Vingroup which started off hotel, resorts and luxury homes. It was his goal that Vingroup would bring world-class luxury to Vietnam.

If you're in a Vin home, you're not in a home that's just nice by Vietnamese standards, you're in a home that's nice by anybody's standards. And he's expanded on that. Our customers live in VinHomes. Their kids go to Vinschools. You go shopping at Vincomretail or a Vinmart convenience store. When you're sick you go to Vinmec. They really are touching every Vietnamese customer. The chairman also looked at his country and realized that we’ll never have a significant middle class without a manufacturing base. And the motor of all manufacturing is the automobiles. It’s not just the manufacturing plant itself but the effect of it on the economy, for suppliers and industrialization in general.

I had to learn a different culture. Every culture has their signature character. For Vietnam and specifically the Vingroup team, there is a lack of patience. They want things now. The chairman evaluated the automotive industry. The Japanese entered the automotive manufacturing industry decades ago but it took 20-25 years to be really good at it. The Koreans were able to do it less – something like 15 years. China’s at it right now, trying to be even faster. China can be successful being fast in some cases, in other cases, they're not. That's all great, thinks our chairman. I want to do it in two years! And that’s two years from scratch. There was no plant, there was no team. In two years, VinFast was going to have a grand opening – and that was that. Oh, by the way, where the plant is going to be is now mostly ocean.

Sowe had to put together a team. We were led by our chairwoman Madame Thuy, who shares the chairman's lack of patience. She's new to automotive but not new to getting things done. I had to motivate people how to get around problems. The team shared two things, a deep knowledge of the automotive industry, and getting really frustrated with just how slowly things happen in the automotive industry.

In order to complete the first car, VinFast relied heavily on partners. (Picture courtesy of Siemens.)
In order to complete the first car, VinFast relied heavily on partners. (Picture courtesy of Siemens.)

In order to pull this off, we had to get the best partners. We didn’t have years building a team, create standards for our partners and suppliers. We had to call on everyone to do their best let them do their thing. Conversations went like this:

Us: “We'd like to be a car company and we'd like to do it in less than two years.”

Them: “Who are you? That's impossible."

Us: “What if we let you do your thing? You’re the expert. We won't get in your way.”

Some would press the point, saying they couldn’t work with specifications. But we had no one creating specifications.

Us: “You know all the dumb, unnecessary steps that automotive companies ask you to do. We just cut all that out. Now, doesn’t that change the timeframe?"

All Digital – No Clay Model

VinFast credits Siemens design, simulation and visualization software. (Picture courtesy of Siemens.)
VinFast credits Siemens design, simulation and visualization software. (Picture courtesy of Siemens.)

The key was to have a digital infrastructure and a digital backbone that allows us to model everything virtually before it is manufactured.

This meant no clay model. Car companies, most styling studios, use clay models. They’re made by hand and then digitized. A digital sculptor will recreate the clay surfaces. Now all of the engineered parts, all the manufacturing, the assembly, safety and all the other requirements have to fit in the virtual digital version of the clay model. When something doesn’t work, you fix it in the virtual model. You then change the clay model. It’s a loop and you keep making changes.

We worked with the digital sculptors and told them to take the lead. You are not following a clay model. It’s up to you to make it beautiful. It has to work with all of what goes in it and requirements, and don’t forget to make it beautiful.

We commissioned some of the best independent audio studios in the world to sketch the designs. They did a lot of sketching.

The Winner, by Popular Vote

Picture courtesy of Siemens.
Picture courtesy of Siemens.

Normally, an automotive manufacturer will hide their designs until the car is revealed. They do some consumer research, but they do it quietly, to very few outsiders, to get feedback on designs. Our chairman decided he wants to put the designs online and have a contest to see what the people of Vietnam would get the most excited about. This seems crazy. But look what happened. We got over 60,000 people voting. We didn’t know if they would buy the vehicle or not, but we certainly knew we had a popular design. When every car company is wasting time second guessing, we had 60,000 people telling us what they liked. There was no second guessing.

BMW’s Lends Technology

We signed an agreement with BMW to license their architecture and technology. When we were sketching, we really didn't know what the actual underlying architecture would be. And normally, we wouldn't even start until they do that. But we're in a rush. It was like preparing a pet but you don’t know if it’s going to be a rabbit, a dog, a cat or a llama.

We went to a technology partner because chairman wanted the vehicles to be aspirational. So, basing our vehicle on BMW helps with that.

We did our first review with Pininfarina in a month. They worked completely digitally. The BMW parts were added.

In two months, we were looking at the sheet metal shape and graphics of the vehicle, exterior and interior. I could see if a Starbucks Venti in the cup holder would interfere with operating the radio. How would the side of the console come up against my leg? All those things. With digital models we were able to evaluate more, start matching textures, colors, lighting and graphics, making all our choices digitally. No models, no painting. Not at this stage.

Picture courtesy of Siemens.
Picture courtesy of Siemens.

Two months later, we had a final detailed physical model. They look like real cars. We had the entire leadership team out to take a look. The vehicles looked great. Everyone was happy. Our partners, all working digitally, had created the cars we wanted in less than half the time it would normally have taken.

VinFast debuts at the Paris Motor Show. “It was a very emotional day for us, says David Lyon, head of design. “Our chairwoman smiled. That’s rare.” (Picture courtesy of Siemens.)
VinFast debuts at the Paris Motor Show. “It was a very emotional day for us, says David Lyon, head of design. “Our chairwoman smiled. That’s rare.” (Picture courtesy of Siemens.)

In the next few months we worked with our partners to create perfectly manufacturable parts. We went right to cutting and forming metal. There was no time to create a physical model for approval, which is normally part of the process. Incredibly detailed part models are made digitally. Build variations, also digital, let us evaluate quality. It all fit perfectly. And it was beautiful. The virtual models let us lock in the right colors, the right textures, we could look at variations. And we were able to get buy off in less than a week instead of waiting three to four months it would take to build models and evaluating them.

Paris Debut

Overjoyed, we decided to unveil the VinFast brand to the world at the Paris Motor Show. We had two models now, a sedan and a SUV. The event was livestreamed, and I think five million Vietnamese watched it. We had Miss Vietnam and David Beckham appear. A Star is Born played in the background.

The Paris show was fantastic. Now, remember this is really just a year after starting from nothing. Driving cars on the stage was very exciting.

Most automotive journalists complain there are no surprises at auto shows. Everything gets pre-screened. Us showing up was a complete surprise. The press conference after the unveiling was 10-15 minutes late because people stayed on the show floor.

VinFast's Klara electric scooter will have 80km range, 50 kph speed and 3G and Bluetooth. (Picture courtesy of Siemens.)
VinFast's Klara electric scooter will have 80km range, 50 kph speed and 3G and Bluetooth. (Picture courtesy of Siemens.)

We launched our first vehicle, an all-electric scooter – or what Americans call mopeds. It has an 800 km range and speeds of 50 kph and is 3G and Bluetooth connected. It’s a smart device.

We took the sedan and the SUV back to Vietnam and started taking orders, building up excitement around this new brand. After millions of people watched the Paris auto shows livestream. For them, it was like a football team. They had been involved with the design. Everything along the way has been shared on social media and had succeeded in generating a huge amount of buzz. When I travel to Vietnam and tell people I work for VinFast, they tell me they watched the Paris show.

in December, the plant was built. It was surprising, because a year ago it had been seawater. We were still reclaiming land. It was built in record time. Vingroup knows how to build things quickly. The plant is in northern Vietnam not far from Ha Long Bay, a gorgeous place. Our VP of Engineering, Shaun Calvert, was given a free hand, spare no expense, work with exactly who he wanted. It is a full plant. There is a press shop, there's a body shop. We make the engines there. There's a paint shop. We've got about 5,000 employees. They can make 250,000 vehicles a year and 250,000 scooters per year. Obviously, looking beyond Vietnam.

So, all eyes are on the first build. We've modeled it. It all worked digitally but will it work in real life? It had to be right the first time. We didn’t have any time for a do-overs. The first one rolls off the line. The chairman gets in, pushes the start button. It starts. He drives it off and around the plant. He had a ball with it. We had put our trust in our digital tools -- and they did not let us down.

I have to admit the first cars coming off the line did not have the best looking interior parts. but the cars looked great. The parts fit right, the cars worked.

Now comes the testing. We tested to validate but we already knew what we were going to get. We took the real cars out, we drove them all over Vietnam, all over the world. We beat the hell out of them. But they performed exactly the way we expected them to. In fact, the prototype build was so good the chairman pulled start production even earlier. My god! The production that was to have started in August this year was now pushed up to June 15th.

The factory grand opening was right where we were building cars. It was an incredibly exciting time. Our prime minister came. All the top journalists and government officials came. It was a hell of a party. The prime minister was offered a drive one of the cars. He got into the backseat. He may have driven himself for years.

We also launched our small car, the Fidel, at the other end of the portfolio from our luxury vehicles, the Lux A and SA. We've got a big plant. It needs it to be flexible. VinFast wants to be a transportation solution so we can make many different transportation solutions. We planned on a flexible digital plant that we can use to build everything: city buses, luxury vehicles, scooters, bumper cars, everything else.

The flexibility relies on in using the digital backbone of Siemens tools. I would say that Siemens probably learned some things along the way about how fast they could do things. And how flexible they are when given a free hand. That's not always the case with a lot of OEM's but it was definitely the case here. We let them do their thing, and they did. It was fantastic for us.


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