Popular automaker unexpectedly closing half of its stores

Most people who have purchased a car don't speak fondly about the experience.

My wife and I have purchased both a new car, and a used one over the past few months. For the new car, we visited the dealer to test drive the vehicle we wanted (a Kia Soul) and placed an order for the color, fit, and trim we wanted.

They did not ask for a deposit, or even have us get the financing processing started. We did that anyways and in the week it took to arrive, had a completed application.

That didn't help and despite us being a quick approval from the finance team, actually buying the car took over three hours. The dealer kept us waiting, made us go meet with a finance person trying to sell us all sort of dubious products, and generally trying to break us in order to get more money.

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 over two hours, and I left without the car (which needed new tires with no workers to put them on over a holiday weekend.

Buying a car should be an easier process.

Image source: Shutterstock

Disrupting broken systems is still hard

Our last 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 they did not make a decent offer for our trade-in. A local dealer, which had the used car I wanted did, 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 United States 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, however, but has just made a major change.

Vinfast closes half its dealerships

Vinfast has a kind of bizarre origin story. The company has a long history and did not start in the electric vehicle (EV) space.

“Vingroup started in Vietnam with two key brands: Vincom and Vinpearl…Vingroup continues to pioneer and lead consumer trends in each of its businesses introducing Vietnamese consumers to a brand new, modern life-style 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,” it shared on its website.

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. 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,” Retail Insider shared.

The company has blamed an overall slow-down in the EV market for its problems.

“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 press release.