VinFast Moves To Enter Indonesia, Bypassing Malaysian Market

VinFast appears to be mobilising for an aggressive expansion into its neighbouring ASEAN markets with the Vietnamese automaker filing intellectual property rights for a number of its models, including fully electric cars, in Indonesia.

As you’ll notice, if their plan is carried out, they would have very intentionally bypassed both Thailand and Malaysia, probably for good reason.

This foray into foreign markets should not be unexpected from the company, which had previously made very clear their intentions to enter both the North American (US, Canada) and European countries, hiring the former Opel veteran as their new CEO.

According to Indonesia-based Otodriver, VinFast’s foray into the Indonesian automotive sector was first tipped off by the website of the country’s official Direktorat Jenderal Kekayaan Intelektual Kemenkumham RI - basically Indonesia’s office of intellectual property.

The first two cars that will be introduced in Indonesia will be the premium-facing Lux A2.0 and the Lux SA2.0, which are based on past BMW platforms and powertrains (from the F10 5 Series and F15 X5, respectively). Fittingly, this duo are the first models to ever be revealed by the automaker after its 2017 founding.

The third breakthrough car earmarked to enter the Indonesian market is the D-segment VF e35. We only know bits and pieces about this one since VinFast has chosen to debut their full EV range with the more compact VF e34, powered by a single 147hp electric motor driving the front wheels and fed by a 42kWh battery.

By contrast, the overseas bound VF e35 features a dual-motor all-wheel drive electric powertrain with up to 402hp and 640Nm and a 106kWh battery for a quoted maximum range of 500km. Deliveries are expected to start in 2022.

Tackling a new market with two SUVs is a bold, calculated move by the company, but we have yet to see enough about Indonesia’s sentiment toward VinFast to know how positively the population might respond to a Vietnamese brand peddling a luxury SUV, much less a D-segment saloon and EV.

The VF e35, as a product, can perhaps benefit most from a fresh pair of eyes and an open mindset. Being a fully electric crossover, there is much less precedent to contrast it against much more expensive EVs of similar sizes from Tesla or Audi.

Bear in mind, VinFast’s electric range will cost a huge chunk less than those brands, undercutting them enough to make would-be buyers more willing to ignore the marque’s newcomer status.

Over the past year, we have seen a number of major players in the automotive space (i.e Honda, Toyota, Mitsubishi) make further long-term investments in their Indonesian business. By annual volume alone, it overshadows Thailand and dwarfs Malaysia, but importantly the country has seen a steady rise in demand for more upmarket vehicles, and this is clearly a contributing factor to VinFast’s interest.

Establishing a beachhead on this battlefield won’t be an easy task, but VinFast does already have a very competitive line-up of vehicles to ensure their best foot is being put forward. Clearly, they see substantial growth opportunity here in terms of sales, but its unclear if their intentions also involve local assembly for export markets.

Should they be gunning for the USA and Europe, they might need the same supply chain and labour advantages that other have kept other automakers so keen on staying, and investing, in Indonesia.