According to Electric Zhijia, recently, according to multiple media reports, VinFast, a new car-making force in Vietnam, is making major adjustments to its European business. VinFast closed all showrooms and service centers in Europe on May 9, and about 90% of employees had received dismissal notices on the same day. In the future, VinFast models will be sold through dealers only in Europe - the current direct sales model will be terminated.
An internal timetable confirmed the restructuring plan: an employee briefing was held on May 2 to explain the next steps; all business premises were closed on May 9; and the resignation compensation agreement was completed before May 22. Under the plan, asset liquidation and lease termination will be conducted in the second quarter. The document attributes the reasons to "macroeconomic environment, tariffs, trade conflicts and overall uncertainty."
Founded in 2017, VinFast is a core project under Vingroup, the largest private group in Vietnam. The company was founded by Vietnam's richest man Pham Nhat Vuong, and aims to create Vietnam's first independent car brand. The name of VinFast is compos
According to Electric Zhijia, recently, according to multiple media reports, VinFast, a new car-making force in Vietnam, is making major adjustments to its European business. VinFast closed all showrooms and service centers in Europe on May 9, and about 90% of employees had received dismissal notices on the same day. In the future, VinFast models will be sold through dealers only in Europe - the current direct sales model will be terminated.
An internal timetable confirmed the restructuring plan: an employee briefing was held on May 2 to explain the next steps; all business premises were closed on May 9; and the resignation compensation agreement was completed before May 22. Under the plan, asset liquidation and lease termination will be conducted in the second quarter. The document attributes the reasons to "macroeconomic environment, tariffs, trade conflicts and overall uncertainty."
Founded in 2017, VinFast is a core project under Vingroup, the largest private group in Vietnam. The company was founded by Vietnam's richest man Pham Nhat Vuong, and aims to create Vietnam's first independent car brand. The name of VinFast is composed of acronyms of several Vietnamese words, representing "Vietnam, Style, Security, Creativity and Pioneer", reflecting its founders' expectations for national brands. VinFast's business covers the production and sales of fuel vehicles and electric vehicles, and its products include electric scooters, electric buses, electric vehicles and charging station systems. The company has a highly automated manufacturing base in Vietnam, covering an area of 860 acres. In addition, VinFast has established a supplier ecosystem around the world to reduce procurement and inventory costs of key components.
VinFast performed strongly in the Vietnamese market, accounting for 20.9% of the market share with sales of 9,800 vehicles in March 2025, firmly ranking first. Its VF 5 model topped the monthly sales champion for the first time, showing its comprehensive layout in the electric vehicle segment. In 2024, VinFast delivered 51,000 vehicles in Vietnam, becoming the highest-selling car brand in the Vietnamese market.
Although VinFast performs strongly in the Vietnamese local market, in the European market, VinFast has low brand awareness and has a serious lack of market penetration. For example, in the first three months of this year, VinFast sold only 55 new cars in the German market. This market performance makes its operating costs too high in the European market and it is difficult to achieve profitability. Although VinFast's sales soared by more than 300% year-on-year, with global sales reaching 97,399 vehicles, the company still recorded a net loss of US$3.18 billion, with annual revenue of only US$1.8 billion. In other words, every time VinFast sells a car, it loses more than US$30,000 (approximately RMB 216,000). In traditional automobile powerhouses such as Germany, VinFast's product strength and brand value are limited, making it difficult to compete with local old car companies.
VinFast shifts its focus from European and North American markets to Asia, especially in markets such as India, Indonesia and the Philippines. The company plans to build factories in India and Indonesia to meet local market demand. VinFast plans to open a manufacturing plant in India on June 30, 2025, and starts operations in Indonesia in October. The company also plans to start selling two locally produced models in the Indian market late 2025, namely the VF6 and the VF7.
VinFast VF6; Image source: VinFast official website
