VinFast's listing on Nasdaq paves the way for Vietnamese businesses to go global
Revenue increased by 91%
Accordingly, in the last quarter of 2023 alone, VFS brought in VND 10,418 billion in revenue, (equivalent to USD 437 million) from the delivery of more than 13,500 electric cars and more than 24,300 electric motorbikes. Revenue growth in the fourth quarter of 2023 increased by 26% compared to the previous quarter and increased by 133% compared to the same period in 2022. For the whole year, Vietnam's first electric vehicle company sold 34,855 cars (marking an increase of 374% compared to the previous year) and 72,468 motorbikes, achieving revenue of VND 28,596 billion (USD 1.198 billion), up 91% compared to the previous year.
After deducting expenses, VinFast recorded a gross loss of VND4,174 billion (US$174.9 million) in the fourth quarter. The gross loss in 2023 is VND13,164 billion (US$551.6 million). VinFast's gross profit margin has improved significantly compared to 2022, from minus 82% to minus 46%. Meanwhile, the gross profit margin in the fourth quarter improved from minus 82.6% to minus 40.1%.
According to the previously set plan, VinFast's capital expenditure (Capex) in the fourth quarter was 213 million USD, mainly used to develop the VF 6 and VF 7 models, build a factory in North Carolina, develop showrooms and charging stations.
In 2023, VinFast accelerated its development with a multi-pronged strategy including: transforming and expanding its global retail network, diversifying its product range, and improving production capacity to create a solid foundation for 2024 and long-term development goals.
VinFast has introduced four new SUV models in Vietnam in many segments, including the flagship models VF 9, VF 5, VF 6 and VF 7. The VF 6 model was just launched in Vietnam in October, recording initial sales that far exceeded the company's expectations.
In the fourth quarter of 2023, VinFast made an important shift from a direct-to-consumer distribution model that is heavy on investment costs, to a more economical hybrid model with a focus on leveraging existing distribution infrastructure, through building dealer networks in the US and globally.
To date, the company has 13 stores in California and 6 dealerships in 5 states: North Carolina, New York, Texas, Florida and Kansas, with 75 dealers signed up to join the network. The company expects to reach about 130 points of sale in North America and 400 points of sale globally by the end of 2024. Of these, sales through dealers will contribute significantly to sales in the second half of 2024.
Ms. Nguyen Thi Lan Anh, VinFast's CFO, also affirmed: "In the fourth quarter of 2023, VinFast recorded significant revenue growth and improved profit margins. We will continue to focus on improving investment efficiency and strengthening the balance sheet by continuing to optimize production costs, BOM costs (standard of materials to make up the product) and capital expenditure (Capex) globally. This will be an important support for VinFast in the process of market expansion, especially in potential markets such as Indonesia and India, thereby strongly promoting sales growth."
New car models continue to impress car enthusiasts around the world.
Target to sell 100,000 cars in 2024
According to a VinFast representative, in fiscal year 2024, VinFast aims to balance revenue growth and cost optimization, based on the optimization of production and material costs, while making strategic investments in potential markets in the region.
To boost electric vehicle sales, VinFast will expand distribution channels by leveraging the network and experience of dealers in each market.
"Success in key markets such as the US will strengthen the company's ability to compete effectively in other markets to increase sales scale, especially untapped and potential Asian markets," emphasized the representative of Vietnam's first electric vehicle company.
At the recent Indonesia International Motor Show (IIMS), VinFast announced its entry into the Indonesian market with a left-hand drive electric car ecosystem, including the VF 5, VF e34, VF 6 and VF 7 models. The design of the models and the unique battery rental option received very positive feedback.
The company has also officially signed a Letter of Intent to cooperate with the first five dealers in Indonesia and plans to set up a CKD manufacturing facility in the country.
In India, just over a month after announcing the signing of the Memorandum of Understanding with the Government of Tamil Nadu, VinFast announced the Groundbreaking Ceremony of the Integrated Electric Vehicle Manufacturing Facility Project in Thoothukudi City in this state. With the vision of becoming the leading electric vehicle manufacturing center in the region, the factory project has a capacity of up to 150,000 electric vehicles per year when officially put into operation.
VinFast’s unique battery leasing policy could also significantly boost sales in new markets. This mechanism helps reduce the initial selling price and monthly operating costs of VinFast cars to be on par with, or even more competitive than, some gasoline models on the market.
The second key goal for 2024 is cost optimization. VinFast is implementing initiatives to reduce material costs by 40% within two years of each model launch; partly through engineering efforts such as parts redesign and platform optimization, and partly through supply and procurement initiatives such as in-house and supplier switching.
VinFast leaders are confident that the company is entering 2024 with positive signs. In California, the direct sales channel recorded a significant increase in orders in January and February, indicating early momentum in the US market. After laying the foundation in markets such as the US, Canada and some European countries, VinFast's global expansion plan in 2024 will focus on other global markets, including potential markets near Vietnam such as Indonesia and India. This move is in line with the strategy of optimizing capital expenditure, including targets for optimizing production and material costs (BOM).
Ms. Le Thi Thu Thuy, Chairwoman of VinFast Board of Directors, shared: "2023 was a successful year with many firsts for VinFast, culminating in the listing event on the US stock exchange. We launched exciting new products, expanded our distribution network, strengthened our position in existing markets and opened up opportunities in important potential markets. These efforts have brought positive signals recently in markets such as the US and Indonesia. Continuing the growth momentum based on solid foundations, we aim to deliver 100,000 vehicles in 2024, reinforcing our commitment to creating a greener future for everyone."
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