The landing of Chinese car brands in Vietnam with competitive prices is a sales support for domestic distributors.
The influx of Chinese car brands has made the Vietnamese market more competitive than ever - Photo: HAX
There is no denying that there is skepticism about the quality of Chinese-branded products from consumers, but in reality, when the economy is in trouble and luxury car sales are sluggish, the sales of competitive Chinese car lines still help domestic distributors make more money...
Luxury car distribution "boss" excited about selling Chinese cars
Like Hang Xanh Auto Service Joint Stock Company (HAX), this distributor just had a favorable third quarter of 2024 with a sharp increase in revenue.
According to the consolidated financial report (FS) for the third quarter of 2024, HAX's revenue reached VND 1,535 billion, an increase of nearly 38% compared to the third quarter of 2023. This is the highest level in the past 7 quarters of HAX.
Sales increased higher than the increase in cost of goods sold, gross profit reached more than 174 billion VND, 1.3 times higher than the same period. HAX gross profit margin increased to 11.3%, and profit after tax reached 90 billion VND, nearly 11 times higher than the same period.
Thanks to the "shoulder" of the third quarter, HAX's revenue in the first 9 months of this year reached 3,695 billion VND, up 27% over the same period. Profit after tax reached 144 billion VND - nearly 10 times higher than the first 9 months of last year.
As the leading distributor of luxury cars, accounting for about 40% of the Mercedes-Benz market share in Vietnam, in a report sent to the Securities Commission, Mr. Do Tien Dung - Chairman of Haxaco, said: "Haxaco's nationwide MG car dealership system has 12 dealers operating effectively, contributing to the rapid and strong growth in car sales during the period."
In addition, Mr. Dung also said that HAX's luxury car segment was more favorable in the third quarter thanks to the policy of reducing registration fees for domestically produced cars.
But if we only count the parent company Haxaco with the Mercedes-Benz car distribution segment in the first 9 months of 2024, the revenue reached 2,205 billion VND, down nearly 17% over the same period.
Data: Financial statements
Previously, 2023 was a difficult year for Haxaco when sales plummeted, Haxaco leaders compared "the automobile industry to a thermometer reflecting the health of the economy".
Due to economic difficulties, people continue to tighten their spending, especially in the luxury segment. Therefore, in 2023, HAX only distributed 1,099 new cars, down nearly 40% compared to 2022.
According to information on the HAX website, when Haxaco announced that it would distribute MG cars through its subsidiary, PTM Automobile Production, Trading and Service Joint Stock Company, many people were surprised because Haxaco is the largest Mercedes distributor in the market. "We are walking on two legs to have sustainable development," Haxaco Chairman Do Tien Dung explained.
Electric cars are more difficult?
Meanwhile, TMT Motors - the distributor of Wuling Mini EV electric vehicle (a competitor of the VF3) is struggling more.
According to the consolidated financial statements for the third quarter, TMT's revenue reached VND355 billion, down 20% compared to the third quarter of last year. Operating below cost, TMT had a gross loss of nearly VND42 billion, while in the same period last year it made a profit of VND59 billion.
After deducting expenses, TMT lost 92.7 billion VND in the third quarter. In the first 9 months, the company's revenue decreased to less than 1,700 billion VND (nearly 2,000 billion VND in the same period), and after-tax profit was negative more than 191 billion VND - a record loss since 2007.
Cheap Chinese electric cars have not saved TMT's business results - Data: Financial statements
Mr. Bui Van Huu - Chairman of TMT - said that the loss was partly due to economic difficulties, people tightening their spending, and car consumption decreasing sharply.
But according to Mr. Huu, the company's financial costs over the past years have been too high due to large inventories. Therefore, the company's board of directors has "aggressively" sold products to cut losses and prepare for the new business cycle.
At the same time, restructuring the entire enterprise, including product restructuring, supplier restructuring and restructuring the entire business operations.
Accordingly, TMT Motors accepts a loss in business results in 2024 to ensure good preparation for the new business cycle...
TMT Motors is introduced as a prestigious enterprise manufacturing, assembling and distributing commercial vehicles in Vietnam with about 50 years of operating experience.
At the end of June last year, TMT cooperated with manufacturer SGMW (SAIC-GM-Wuling) to launch the Wuling Hongguang Mini EV assembled at the factory in Hung Yen province. This car line has a fairly cheap price, only about 200 - 300 million VND, in the same segment competing with Vinfast VF3.
Chinese electric cars flood into VietnamSource: https://tuoitre.vn/xe-trung-quoc-o-at-do-bo-vao-viet-nam-trum-xe-sang-co-loi-tro-lai-20241115110525561.htm
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