Vietnamese automaker VinFast opened its first franchised dealership in California, ending its direct-sales model in the state and the U.S. after struggling to sell its electric vehicles.
The VinFast San Diego store is part of Sunroad Automotive Group, which sells 14 brands at nine locations and has annual sales of 30,000 vehicles, VinFast said Aug. 19.
VinFast opened distribution to franchised dealers in late 2023 but kept its 15 California direct-sales showrooms. VinFast said April 24 it would close those stores and seek dealer partners.
“We believe in VinFast’s strong potential to make a lasting impact in the North American market,” Uri Feldman, president of Sunroad Holding Corp., said in a statement.
VinFast arrived in California in 2022 with plans for a vast direct-sales network across the U.S. It now has “nearly 30″ franchised dealerships in 14 states, the company said in a press release. VinFast didn’t give an exact number.
The automaker picked a site for a North Carolina factory in 2022, but it put those plans on hold last year.
Bloomberg reported in mid-August that VinFast is shifting its expansion plans to Asia and away from North America and Europe after deep financial losses.
In May, VinFast said it planned to close half of its 10 corporate stores in Canada to focus resources elsewhere.
Amid these broader strategic shifts, VinFast has turned to franchised dealerships to help in the U.S.
“VinFast is accelerating the development of its dealership network across the U.S., with California identified as a top priority state due to its significant EV growth potential,” the company said Aug. 19.
The automaker, which primarily sells in its home market, has relied on the VF 8 and VF 9 crossovers imported from Vietnam, which are eligible for the $7,500 federal EV credit through leasing only. The government incentive expires Sept. 30.
In the first half of the year, VinFast had 947 U.S. registrations, a 37 percent decrease from a year earlier, according to data from S&P Global Mobility. The two-row VF 8 had 797 registrations, and the three-row VF 9 had 150, the data showed.
Because VinFast doesn’t break out U.S. sales from global deliveries, registrations serve as a proxy. But registrations lag sales numbers because of the time it takes to collect the data.
VinFast said in early 2024 that it would bring several additional electric crossovers to the U.S., including the VF 3 microcar that could serve as a sub-$30,000 entry vehicle. But the automaker hasn’t updated those plans and only has the VF 8 and VF 9.
The VF 8 starts at $41,100 with shipping in the U.S., and the VF 9 starts at $64,100, also with shipping. VinFast is advertising lease deals with zero money down at $279 per month for the VF 8 and $449 per month for the VF 9, both for 24 months.
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