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Uzone.id – Vietnamese carmaker VinFast has been making headlines with its aggressive expansion plans. They’re not just targeting Asia, but aiming to take on established players in the US and Europe. It’s a bold move for a young company, and it comes at a cost.
VinFast is making a big push to prove that Asian countries other than Japan and Korea can compete in the global automotive market. Vietnam, especially as a representative of Southeast Asia, wants its car brands to be recognized worldwide.
But their aggressive expansion has been costly, with billions of Dong invested, but they hope it will pay off in the long run.
VinFast suffered losses of up to trillions of rupiah in the first half of this year. As a start-up company, management is still ‘burning money’ to expand.
In its financial report, the company recorded a net loss of 18.76 trillion Dong, or around US$762 million in the second quarter of 2024. The loss increased compared to 13.4 trillion Dong in the same period the previous year.
President Director of VinFast, Le Thi Thu Thuy, said the company’s losses were caused by higher impairment charges, even though revenue rose 9% to 8.67 trillion Dong.
“We are still a start-up company and anticipate losses in the next few quarters. Losses in the second quarter were mainly caused by impairment charges on remaining net assets,” he said, citing Bloomberg.
VinFast revealed that the impairment charge for residual net assets in the second quarter reached US$104 million, compared to the previous quarter which was only US$5 million. This highlights the difficulties companies have in overseeing their assets.
As a means to prepare for these losses, VinFast intends to market its vehicles in around 50 countries. This is a well-thought-out move, taking into account that many automotive giants are experiencing a decline in their global ambitions for electric vehicle plans.
During the second quarter of 2024, VinFast will send a total of vehicles, of which 51% are aimed at the company’s related parties. This reveals that VinFast still uses its internal ties to support its sales figures.
In the coming years, VinFast anticipates launching a manufacturing facility in India by the first half of 2025. The company is scheduled to commence groundbreaking for a factory in Indonesia in July 2024.
This step is anticipated to strengthen VinFast’s place in the international market. We also stress the crucial part the Vietnamese domestic market plays in generating income for the remainder of 2024.
The Vietnamese market accounted for more than 90% of total shipments in the second quarter,” he concluded. As of August 31, 2024, VinFast has 155 showrooms in all markets, and around 70% of them are official dealers. In the future, VinFast is also trying to expand its distribution reach.
VinFast factory in Indonesia
Most recently, VinFast through PT VinFast Automobile Indonesia officially laid the first stone or groundbreaking for an electric car assembly facility in Subang, West Java.
Vingroup Chairman’s Senior Advisor, Nguyen Duc Thanh, said the initial investment for the assembly facility is worth US$ 200 million with a production capacity of 50,000 electric car units per year.
This assembly facility also includes several main production areas such as a Body Shop, General Assembly Shop, Paint Shop testing area, etc. On the other hand, the assembly facility is set to initiate operation during the fourth quarter of 2025 by creating VF 3, VF 5, VF 6, and VF 7 electric vehicles for consumers in Indonesia.
The VinFast VF5 electric car was formerly launched in Vietnam and some states of Europe. These non-emission vehicles will most likely play in the beginner or entry-level class.
VinFast VF5 is an electric SUV model in the A segment
This electric car is equipped with a battery with a capacity of 37.23 kWh. Electricity consumption is only 115 Wh/km. VinFast claims this electric car can travel as far as 326.4 km on one charge.
VinFast VF3 is a stylish electric mini SUV. This mini-SUV has dimensions of 3,190 mm in length, 1,679 mm in width, and 1,622 mm in height, as well as a high ground clearance of 191 mm.
Then the VinFast VF6 becomes an SUV with a simple and modern appearance. This electric car has a range of around 399 km.
