The Mercedes-Benz Kingpin of Vietnam: Navigating Unprecedented Challenges.

In an interview with Báo Đầu tư Chứng khoán, Mr. Do Tien Dung, Chairman of the Board of Directors of Haxaco, a leading automotive service company in Vietnam, revealed that the company is facing unprecedented challenges. The company recently announced a significant decline in profit for the second quarter of 2025, with a 53% drop compared to the same period last year.

Unprecedented Challenges in Two Decades of Mercedes-Benz Dealership

Mr. Dung attributed the challenges to the current downturn in the automotive market, with continuous price declines and intense competition among brands eroding the profit margins of dealerships. The situation is particularly difficult for luxury brands like Mercedes-Benz, as their models are nearing the end of their product cycles, resulting in a significant drop in sales. Some dealerships are struggling to sell even 10-20 units per month, a sharp decline from their peak performance.

The challenges have forced Haxaco to make a difficult decision to close down one of its Mercedes-Benz dealerships in Kim Giang, Hanoi, a first in the company’s history. This closure has resulted in significant losses in terms of personnel, facilities, and inventory. “In our 20 years of dealing in Mercedes-Benz, we have never faced such difficulties,” said Mr. Dung. Despite the challenges, the company remains committed to protecting the interests of its shareholders.

For the first time, we had to close our Mercedes-Benz dealership in Kim Giang, Hanoi, which resulted in substantial losses in terms of personnel, inventory, and location. However, we worked with the brand, and the closure was necessary due to various factors, including the brand’s strategy to streamline its operations.”

Real Estate Plans Stalled in a Challenging Market

To mitigate the impact of the difficult market conditions, Haxaco planned to sell a 6,282 square meter plot of land on Vo Van Kiet Street in Ho Chi Minh City. However, the auction failed to attract investors due to the requirement for a public auction process. Mr. Dung acknowledged that the failure to sell this real estate asset would impact their business plans for the year. The company will propose to its shareholders to consider selling the asset at a reasonable price during the upcoming Annual General Meeting.

Third Quarter Challenges and Profitability Concerns

According to Mr. Dung, the third quarter is expected to be particularly challenging due to various factors, including the traditional quiet month of August, customers’ expectations of year-end discounts, and intense competition among brands. The luxury car segment is not expecting any new models, and the closure of the Kim Giang dealership will also impact the quarter’s performance. Meanwhile, the MG brand, which was previously a bright spot for the company, is now facing increased competition, affecting dealership profits despite stable sales.