( Money Week): Not satisfied with a business empire that covers just about everything in his native Vietnam, property mogul Pham Nhat Vuong is making a move into the electric car business.
There was a sinking feeling in Hanoi earlier this month when Vietnam’s richest man, Pham Nhat Vuong, entered the electric-car race. Shares in his sprawling conglomerate, Vingroup, fell 2% on news that Vuong had become the latest billionaire to be seduced by this most 21st century of vanity projects and the entire benchmark VN index drooped in sympathy.
Vuong, 51, is “so intent on exporting electric vehicles to the lucrative American market in 2021” (not to mention Europe and Russia) that he’s ploughing $2bn of his $9bn fortune into the new VinFast venture, notes Bloomberg. The rest will come from Vingroup. “Our ultimate goal is to create an international brand,” he says – a challenge that has so far eluded him despite an eventful international business career. VinFast’s “homegrown cars” certainly face an uphill struggle to succeed overseas: “Many Chinese start-ups, backed by billions in funding, have bet on the prospects for EVs [electric vehicles] in the world’s biggest market, but few are making money.” Even in Vietnam, Vuong faces formidable competition from established foreign players such as Toyota, Ford and Hyundai.
The land of Vin-everything
Vingroup’s rise has mirrored that of Vietnam, one of Asia’s fastest-growing economies, says the Financial Times. In fact, Vuong – the richest of the Vietnam’s five billionaires – has become so dominant that “Vietnam is rapidly becoming the land of Vin-everything”. The group, which started as a pot-noodle business in post-Soviet Ukraine, made its name in property and resorts before expanding into a “cradle-to-grave” enterprise. “Today a Vietnamese man or woman of a certain class might live in a Vinhome, send their children to a Vinschool (and from 2020 a VinUni), holiday at a Vinpearl resort and charge their VinFast electric scooter at a VinMart.” Smartphones and now cars round out the offer.
Vuong’s ascent “personifies the post-Vietnam War story of this nation”, says Forbes. Born in 1968 in Hanoi, his father served in the North Vietnamese air defence force and his mother ran a pavement tea-stand. The Communist North “won the war and united the country”, but “lost the economic battle”. Growing up in poverty, Vuong “escaped his circumstances with books”. Something of a maths prodigy, he won a scholarship to study economics at the Moscow Geological Prospecting Institute. The timing of his 1993 graduation was fateful: the Soviet Union had collapsed and back at home Vietnam was experimenting with its own “Doi Moi” market-based reforms.
Newly married Vuong took advantage of the post-Soviet opportunities, making his way to Ukraine, where the couple opened a restaurant and began making instant noodles. By 2010, when he sold up to Nestlé for an estimated $150m, Vuong had become “Ukraine’s processed-food king”.
For years, Vuong funnelled money from his noodle empire back to Vietnam, increasingly targeting property. He began with a luxury resort, then moved into commercial property in Hanoi with such aggression that in the early years of the decade he was often described as “the Vietnamese Donald Trump”. Unlike Trump, Vuong is considered “modest and down-to-earth”, says The Independent. Don’t let that fool you. He often plays football for Vingroup – as a striker. “Attacking is better than defending,” he says. And that applies to everything.