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“City Auto’s Shareholder Meeting: Foraying into Electric Vehicles, Electing Chairman’s Son to the Board”

21 May, 2025

City Auto’s 2025 Annual General Meeting was held in the morning of May 20th. Photo: Tu Kinh

For 2025, the company targets a sales volume of 9,200 vehicles, revenue of 8.6 trillion VND, and a dividend plan of 10%. The projected after-tax profit is 100 billion VND, the second-highest in the company’s history, only surpassed by the peak year of 2022. However, after the first quarter, the company has only achieved about 3% of the profit target, causing shareholders to express concerns about the feasibility of the plan.

At the meeting, Deputy General Director Tran Quang Tri affirmed that the Management Board had conducted a thorough evaluation before presenting the plan to the shareholders. According to Mr. Tri, the automotive industry has a distinct cyclical nature, with profits typically concentrated in the second half of the year, especially in the third and fourth quarters when car manufacturers tend to offer more supportive policies to dealers.

City Auto aims for the second-highest after-tax profit in its history

At the same time, City Auto is restructuring its revenue streams by expanding supplementary services such as accessories, finance, insurance, and especially pre-owned vehicles. After years of stagnation, the used car segment is being relaunched starting in the second quarter of 2025, leveraging the existing showroom ecosystem. “City Auto will focus on generating revenue from sources other than new car sales. This is the real profit driver in the context of intensifying competition,” said Mr. Tri.

Chairman of the Board of Directors, Tran Ngoc Dan, acknowledged that profit margins from new car sales are currently very low due to continuous price reductions by manufacturers to stay competitive. Therefore, for many years, City Auto has been exploiting “secondary products,” which are, in fact, the primary revenue stream. Specifically, the company has been promoting car beautification services, accessories, financial and insurance services, and maximizing its scale advantages to negotiate the best discounts from partners.

A highlight of the meeting was the strategy to expand into the electric vehicle sector. Mr. Dan shared that City Auto is piloting the distribution of electric vehicles through a collaboration with VinFast. The first showroom in Tan Binh is already operational, the second one in Thu Duc is under renovation, and by September, there are plans to have three showrooms. “This is our first step into the electric vehicle business,” said the Chairman.

Chairman of the Board of Directors, Tran Ngoc Dan, shares the business orientation with shareholders. Photo: Tu Kinh

City Auto not only aims to distribute electric vehicles but also has ambitions to move deeper into the supply chain, including the production of parts, accessories, and supporting industries. According to Mr. Dan, the company wants to move upstream in the automotive value chain to gain more control and establish a solid position in the long term. He also emphasized the significant opportunity presented by the market’s strong restructuring under the influence of the electric vehicle trend.

To implement these strategies, City Auto proposed and received shareholder approval for two capital-raising plans. The first is to privately issue a maximum of 15 million common shares at a price not lower than the book value as of December 31, 2024, which is 10,854 VND per share. The second plan involves issuing preferred shares with a fixed dividend rate of 7% per annum, plus a minimum bonus dividend of 5%. These preferred shares will be convertible into common shares after 12 months and before the end of 5 years from the issuance date. Both plans are exclusively for professional securities investors and have a minimum lock-up period of one year.

If successful, City Auto’s charter capital is expected to exceed 1,250 billion VND. Looking ahead, Chairman Tran Ngoc Dan sets a goal of reaching a market capitalization of 5,000 billion VND for City Auto. “We are currently dealers for many major car brands. If we don’t expand and upgrade our capabilities, we will fall behind and lose our competitive advantage,” he said, “The shift to electric vehicles is opening up a new game, and to participate, we need a strong financial foundation.”

This year’s meeting elected Mr. Tran Long, the son of Chairman Tran Ngoc Dan, as a member of the Board of Directors for the 2024-2028 term, replacing Mr. Nguyen Dang Hoang, who resigned for personal reasons. Although Mr. Long has not officially held a position at City Auto before, he is currently the Chairman of several companies, including the Dason Group, Vougue Resort, DasonMotors, and Auto Tan Thuan. Mr. Tran Long currently holds 7.16% of City Auto’s capital.

With this development, Mr. Tran Ngoc Dan and his two sons, Mr. Tran Lam and Mr. Tran Long, now hold 3 out of 5 seats on City Auto’s Board of Directors. The total ownership of CTF shares by these three individuals is nearly 24.8% of the capital.