Maybank Investment Bank said Tuesday that it sees VinFast Indonesia faces intense competition across battery electric vehicles (BEV) segment in Indonesia due to its relatively weak brand recognition.

Maybank said in a note that in the competitive five-seater BEV segment, VinFast faces challenges from established Chinese brands like BYD, Wuling, Chery, MG, and Neta in Indonesia.

Despite this, it noted VinFast differentiates itself through its extensive warranty offerings, battery subscription plans (hence offering at least 20 percent lower upfront costs than its rivals), and plans to replicate its extensive electric vehicle (EV) ecosystem in Indonesia through Green SM taxi expansion and potential entrance V-Green charging station.

“However, we see limited immediate impact on market leaders like Astra International Tbk PT ASII amid Indonesia’s nascent EV adoption, preference for larger vehicles such as seven-seaters, and after sales and resale value concerns,” said the research house.

According to Maybank, the impact on ASII’s dominance is likely to be minimal in the near term due to VinFast’s relatively weak brand recognition.

Other barriers include fairly slow EV adoption due to prevailing EV challenges, limited product offerings, and greater preference for seven-seater vehicles that can cover long distance travel.

Maybank noted that ASII’s entrenched position, broad product portfolio, extensive distribution network, great after sales service, easy-to-find replacement parts, and strong financing ecosystem have led to the company’s strong customer loyalty, providing significant buffers against new entrants.

This has proven ASII’s resilient market share in 10M24 amidst weak domestic car demand.

ASII’s market share inched higher to 56.5 percent in Oct-24 (versus 55 percent in Sep-24 and Oct-23), resulting in 56.5 percent 10M24 market share (versus 55.7 percent 10M23 share).

Notable market share loss as EV gained traction was experienced by Honda (-340 basis points [bps] year on year [y-o-y]), Suzuki (-30 bps y-o-y), and Hyundai (-90 bps y-o-y).

In February 2024, VinFast entered Indonesia through the launch of two BEV products – VF 5 and VF e34 at IIMS and GIIAS.

It goes head-to-head with a number of five-seater Chinese BEV brands such as those offered by BYD, Wuling, and Neta.

As of Oct-24, it has 17 dealer showrooms in Indonesia.

Unit deliveries started to roll-out in the third quarter, albeit still relatively small compared to total domestic sales.

Currently, VinFast has 17 dealer showrooms in Indonesia, and has partnered with several multi-finance players.

It is looking to expand its dealership and finance ecosystem.

VinFast plans to establish a significant presence in Indonesia through establishing its EV manufacturing facilities in Subang, West Java.

It has acquired land bank in Subang and the completely knocked down (CKD) facility will have an initial annual capacity of 50,000 units and is expected to come online by 2025.

Depending on customer reception and sales in Indonesia, VinFast may further develop this facility into an integrated, end-to-end auto manufacturing plant, covering from its assembly, parts manufacturing, body works.

VinFast aims to increase brand awareness and customer experience through service provided by its sister company – GreenSM, which is expected to enter the Jakarta market before 2024 ends.

Its VinFast-exclusive charging station, V-Green, is also planning expansion in Indonesia to complete its EV ecosystem, which may accelerate its market penetration.

It is noted that VinFast as Vietnam’s leading automaker, has rapidly transitioned into a prominent battery electric vehicle producer, leveraging the support of its parent company, Vingroup.

its full fledge production facility in Haiphong, Vietnam sits on 335 hectares and has an annual production capacity of up to 300,000 units with 60 percent localization rate thanks to the presence of an onsite supplier park.

The firm has captured a 24 percent share of Vietnam’s passenger car market, surpassing Toyota.

VinFast has also developed a comprehensive EV ecosystem, including charging infrastructure (V-Green) and smart mobility platform (XanhSM), which has bolstered its brand equity and accelerated BEV adoption in its domestic market.

Expanding internationally, VinFast has targeted key markets, including North America, India, the Philippines, and Indonesia.

It is noted that Xanh SM (Green SM), as VinFast’s business to business (B2B) customer, has been key to pushing for EV adoption in Vietnam by bringing real-life experience to consumers.

Apart from Hyundai, which recently launched the Ioniq 5, VinFast is the only other BEV player in Vietnam.

VinFast’s share of BEV penetration has significantly increased from approximately 7 percent of total passenger vehicle sales in 2023 to around 24 percent in 10M24.

This improvement is attributed to increased brand awareness in Vietnam, enabling Vinfast to reach a wider customer base.

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