VinFast to close showrooms in Europe

As reported by the German portal Elektroauto-News.net, all European sites are expected to shut down this Friday. Two insiders reportedly confirmed that around 90 per cent of staff were informed of their dismissal in early May. An internal staff meeting is said to have taken place on 2 May to outline the next steps.

The timeline presented during the meeting appears very concrete: a ‘showroom shutdown’ is scheduled for 9 May, with severance agreements to be finalised by 22 May. Asset liquidation will follow in the second quarter, along with the termination of lease contracts.

Cited reasons include “macroeconomic conditions, tariffs, trade disputes and general uncertainty.” Elektroauto-News.net quotes directly from the internal document: “The ongoing uncertainty makes it impossible to continue – the direct sales model no longer works.”

The direct sales model is a key point here. When entering the European market, VinFast – following the example once set by Tesla – aimed to sell its vehicles directly to customers via a small number of its own outlets. That strategy is now being abandoned. In the future, VinFast models are expected to be sold via dealerships instead.

That also explains why ‘only’ 90 per cent of staff have been made redundant – the remaining employees will reportedly be transferred to new retail partners. However, the names of these partners have not been disclosed. It is currently unclear whether such partnerships even exist yet, given the tight schedule – VinFast did not respond to an enquiry from Elektroauto-News.net.

This approach is not without precedent: in the US, where VinFast’s market launch has also been sluggish, the company’s 38 own direct-sales outlets (across 16 states) are likewise set to be closed. For the US market, VinFast has announced a shift to a franchise model, as revealed in the company’s 2024 annual report.

However, the accompanying press release also noted that VinFast “is initiating plans to develop a widespread dealer network across major cities in Europe.” Deliveries of the VF 6 had just begun – the second model in Europe after the larger VF 8.

The financial results recently released may explain the strategic shift in both the US and Europe. While VinFast managed to nearly triple its electric vehicle sales last year to around 97,400 units, most of these were delivered in Asia. The company remains deeply in the red: despite generating around 1.8 billion US dollars in revenue, VinFast posted a net loss of approximately 3.18 billion dollars.

elektroauto-news.net (in German)