Struggling car company swiftly shuts down half its stores
Most people who have purchased a car don’t speak fondly about the experience.
My wife and I have purchased a new car and a used one in the past few months. For the new car we visited a dealer to test-drive the vehicle we wanted (a Kia Soul) and placed an order for the color, fit and trim.
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The dealer did not ask for a deposit, nor even ask us to start the financing process. We did that anyway and in a week we had a completed application.
That didn’t help: Even as we received a quick approval from the finance team, actually buying the car took more than three hours. The dealer kept us waiting and required us to meet with a finance person, who was trying to sell us all sorts of dubious products and generally trying to break us in order to get more money.
In addition, the price did not match any of the advertised deals, and the whole process felt very customer-unfriendly.
Buying a used car a few weeks later wasn’t much better. I was paying cash and the process still took more than two hours, and I left without the car, which needed new tires, and no workers were available on a holiday weekend to install them.
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Disrupting broken systems is still hard
Our past few cars came from Carvana, a company that did a good job taking pain points out of the car-buying process. For those sales we picked our car online, filled out the financing paperwork, and in one case set up a trade-in.
This time, we could not use Carvana — a company that flirted with bankruptcy largely because rivals have knocked off its business model — because it did not make a decent offer for our trade-in.
A local dealer that had the used car I wanted did make a fair offer, so that forced us to use the conventional torture-the-customer dealer system.
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Carvana is not the only company trying to disrupt the dealer system. Tesla has used a direct-sales model, setting up stores in malls and building its own dealership-like locations.
Vinfast, a Tesla rival, has tried to use a similar model, but that largely failed in the US, where the company has changed to more of a classic model of selling through third-party dealers.
It kept the company-owned direct-sales model in Canada, but it has just made a major change.
Vinfast closes half its dealerships
Vinfast’s origin story is unusual. The company has a long history and did not start in the electric vehicle space.
“Vingroup started in Vietnam with two key brands: Vincom and Vinpearl,” the website says. “Vingroup continues to pioneer and lead consumer trends in each of its businesses, introducing Vietnamese consumers to a brand new, modern lifestyle with international-standard products and services.
“Vingroup has created a respected, well-recognized Vietnamese brand and is proud to be one of the nation’s leading private enterprises.”
The company makes multiple models of EVs, some of which are sold in the U.S. and Canada. The company has made the decision to make a major change in Canada.
“VinFast is scaling back its Canadian retail operations, closing half of its 10 corporate-owned stores amid a challenging EV market,” Retail Insider reported.
“The move comes just two and a half years after VinFast entered the country with an ambitious plan to disrupt the electric vehicle sector and build a direct-to-consumer sales model across Canada.”
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The company has attributed the move to an overall slowdown in the EV market.
“It is critical that we continue to adapt and evolve our business to ensure we are best positioned for future growth,” Vinfast said in a news release.
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