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VinFast and Togg: Two new brands with real potential

Vietnamese and Turkish automakers are already very successful in their countries of origin. What about on a global stage?

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There is no doubt about the success of Vietnamese and Turkish automakers in their home countries. However, what about on a worldwide scale?

In the auto industry, there are three distinct communities. The first consists of economies where people generally have a high standard of living. These countries tend to be the more developed ones. China is another example of a country with a rapidly expanding economy and its own set of unique challenges. And the final group consists of all economies in the process of developing that have not yet undergone a dramatic change.

In the latter case, the industry is still developing and has enormous potential, particularly in economies where personal vehicle ownership is uncommon. The vast majority of the population in India cannot afford a car despite the country’s large size. Expectations for sales in this region are typically more upbeat than those for regions where growth has slowed, such as Europe, the United States, and Japan.

New automakers have arisen in response to the promising prospects of these markets. New, ground-breaking businesses like VinFast and TOGG are possible only because of optimistic forecasts for the future. We’re referring to new names in consumer goods that emerged to meet a need that was going unfulfilled by established companies. They intend to penetrate international markets in an effort to gain market share. The question is, “Will they survive?”

To The Rescue, the Tropics Are Now Available In The Industrialized World

VinFast, founded in 2017, is a Vietnamese automaker that is a subsidiary of Vingroup, Vietnam’s largest conglomerate. With the establishment of a factory in Hai Phong, a major industrial center in northern Vietnam, production began. The company made its first international sales in 2019, and by the end of 2021, it had shipped its first batch of fully electric vehicles to Vietnam.

The company has declared ambitious plans for international expansion. The export of electric vehicles to markets like North America and Europe, and more recently Indonesia, is one example. VinFast has shown off 10 distinct models so far, with 6 of them being electric.

The wager is difficult to fulfill. The company in question is a relative newcomer to the auto industry, having only begun production vehicles within the last few years. The outcomes are acceptable in the home environment. Over the first six months of 2022, VinFast sold more than 14,700 vehicles in Vietnam, placing it in the top ten.

However, its market share declined from 10.6 percent to 7.3 percent between the corresponding periods of 2021 and 2020. The best-selling brand, Toyota, sold 43,100 vehicles and increased its market share from 18.3 to 21.2%.

The Turkish Olympic Gliding Team (TOGG):

The automotive industry is starting to take notice of Turkey for a number of reasons, including the country’s rise to regional prominence and its status as a major center for vehicle production. The presence of a domestic constructor was long overdue.

Turkey’s Electric Vehicle Infrastructure Group (TOGG) was founded to meet the growing demand for electric vehicles in Turkey. That TOGG will finally make the electric car available to people in Turkey is arguably the company’s most compelling feature.

Pininfarina-designed bodies have been seen on two already-released models: a C-segment sedan and a C-SUV. We have a straightforward strategy: Produce 175,000 fully electric vehicles per year for export to surrounding countries.

Dreamers Or Realists?

This raises the question of whether or not these new brands will be successful in markets outside of their initial launch areas. Consumers in Vietnam and Turkey will undoubtedly benefit from having cars assembled in their respective countries.

There’s no doubt that the two brands can do well in the region, especially if they put their attention on electrification. The transition from internal combustion engine (ICE) to electric vehicle (EV) technology has been slower in developing markets. Any effort made to hasten the change would be greatly appreciated.

However, the situation is more nuanced in established markets. Sales of new automobiles are falling instead of rising. There is less space for established brands, and the newest upstarts, with the notable exception of Tesla, are still fighting for a foothold in the industry. Just being electric isn’t good enough anymore. The person who shows up last will either have to come up with a novel solution or risk being left behind.

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Felipe Munoz is a JATO Dynamics Automotive Industry Specialist and wrote this article.