Asset scale exceeds VND 130 trillion
VinFast Auto Ltd., a subsidiary of Vingroup Corporation, recently announced its financial report for the fourth quarter and the whole year of 2023.
According to the report, as of December 31, 2023, VinFast’s total assets were nearly VND 131 trillion, an increase of over VND 17 trillion within one year. The increase in assets mainly came from the increase in inventory (over VND 7 trillion) and the increase in fixed assets (over VND 10.7 trillion).
In terms of capital, total short-term borrowings increased by an additional VND 72.3 trillion, while long-term borrowings decreased by nearly VND 25.8 trillion, and negative equity increased by an additional VND 29.1 trillion.
In terms of business operations, VinFast’s revenue this year reached VND 28.6 trillion, an increase of 91% compared to 2022, thanks to the increase in vehicle deliveries. In the past year, VinFast delivered a total of 34,855 electric cars, a 374% increase compared to the previous year. In addition, there were 72,468 electric motorcycles.
The increased revenue helped VinFast reduce losses from core business operations to VND 40.23 trillion, compared to VND 42.256 trillion in 2022.
However, due to high financial costs, VinFast incurred an additional VND 57.176 trillion in net losses in 2023, bringing the accumulated losses to VND 184.293 trillion.
At the annual shareholders’ meeting in 2023, billionaire Pham Nhat Vuong predicted that VinFast’s financial situation would improve significantly in 2024 and 2025 as production volume increases. The Chairman of Vingroup also affirmed that the green revolution presents a great opportunity. The current VinFast team is becoming stronger day by day, truly mastering the technology. VinFast will be a potential project and will later become the best project of Vingroup.
What did VinFast achieve in 2023?
In 2023, VinFast accelerated its development with a multi-directional strategy, including expanding the global retail network, diversifying the product range, and improving production capacity to establish a solid foundation for 2024 and long-term development goals.
In terms of product launches, VinFast introduced 4 new SUV models in Vietnam in various segments, including the flagship models VF 9, VF 5, VF 6, and VF 7. The VF 6 model was launched in Vietnam in October and recorded initial revenue far exceeding the company’s expectations.
In the fourth quarter, VinFast made an important transition from a direct distribution model to a more cost-effective hybrid model with a focus on leveraging existing distribution infrastructure through the establishment of agent networks in the US and globally.
Expansion plans in 2024
In the financial year 2024, VinFast aims to balance revenue growth and cost optimization based on production and material cost optimization platforms, as well as strategic investments in potential markets in the region.
To boost electric vehicle sales, VinFast will expand its distribution channels by leveraging the network and experience of dealerships in each market.
Success in key markets such as the US will strengthen the company’s competitive advantage in other markets to increase sales volume, especially untapped and high-potential Asian markets.
At the Indonesia International Motor Show (IIMS), VinFast announced its entry into the Indonesian market with a range of right-hand drive electric vehicles, including the VF 5, VF e34, VF 6, and VF 7 models. The designs of these models with unique battery rental options have received very positive feedback.
The company has also officially signed a Letter of Intent to cooperate with the first 5 dealerships in Indonesia and plans to establish a CKD manufacturing facility in the country. In the latest development, immediately after signing the Letter of Intent with the 5 dealerships in Indonesia, the Vietnamese automaker has officially signed a Memorandum of Understanding to supply 600 electric cars to 3 Indonesian companies.
In India, just over a month after announcing the signing of the Memorandum of Understanding with the Tamil Nadu state government, VinFast announced the groundbreaking ceremony for its Integrated Electric Vehicle Production Facility in Thoothukudi city in this state. With a vision to become a leading electric vehicle production center in the region, the factory project has a capacity of up to 150,000 electric vehicles per year when it becomes operational.
VinFast’s unique battery rental policy can significantly boost sales in new markets. This mechanism helps reduce initial sale prices and monthly operating costs of VinFast vehicles, making them equivalent or even more competitive than some gasoline models on the market.
The second key goal in 2024 is cost optimization. VinFast is implementing initiatives to reduce material costs by 40% within two years of launching each vehicle model, partly through technical efforts such as redesigning parts and optimizing platforms, and the rest through supply source and procurement initiatives such as internal supply and supplier switching. In addition, VinFast will continue to optimize production and other costs.
VinFast aims to deliver 100,000 vehicles in 2024 through an expanding distribution network. Brighter macroeconomic prospects also support the company’s development strategies.
