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While Vietnamese private automakers achieve breakthrough development, state -owned automotive enterprises remain sluggish or are operating at a loss despite being offered considerable incentives, Thanh Nien newspaper reported.
Domestic private auto makers go global
Recently, VinFast, a unit of conglomerate VinGroup, has conducted the first test runs of its sedan, SUV and hatchback before handing them over those to the customers this June.
According to VinFast’s General Director James DeLuca, VinFast has made an unbelievable long stride result in just nearly two years while other automobile manufacturers in the world would need 36 to 60 months to do the same.
To better brand identity and make it more appealing globally as well as in the Vietnamese market, VinFast decided to present VinFast cars at the Paris Motor Show, one of the world’s busiest automobile events, and quickly named Vietnam on the map of the world’s automotive industry.
Another success story is Truong Hai Auto Corporation (THACO). Statistics from the Vietnam Automobile Manufacturers Association (VAMA) showed that THACO remained on the throne in term of car sales with the sales of its assembled Kia, Mazda, Peugeot, Thaco Bus, Thaco Truck (excluding BMW and MINI) reaching 8,148 vehicles in April, up 1% compared to the previous month.
In 2015, THACO left Toyota behind to become the largest car seller in the domestic market despite being weaker than the latter in both brand identity and financial potential.
According to French car expert France-based Khuong Quan Dong, VinFast had smart and daring strategies to shorten its road to the world’s market by joining in one of the world’s most well-known automobile exhibitions.
Not only did VinFast successfully catch international attention but it also highlighted the “national pride” among the domestic consumers.
The expert expected the Vietnamese government would create smooth and favorable policies for nourishing and developing sustainable automobile industry.
State-owned carmakers incur tremendous loss
Contrary to the efforts and breakthroughs of some private enterprises, state-owned ones are suffering escalating loss.
VEAM, which stands for Vietnam Engine and Agricultural Machinery Corporation, is one of the biggest Vietnamese businesses in mechanical engineering, machine building, and truck assembly and manufacturing with the VEAM Motor brand (VM).
Recent reports of its Supervisory Board revealed that nearly half of the corporation’s offshoots ran at a loss in 2018, many of its daughter companies have suffered losses for years that needed to be put into special supervision, even filed for dissolution and bankruptcy.
By the middle of 2018, VEAM and its member units’ losses amounted to nearly VND380 billion (US$16.3 million).
In fact, as early as in 2010, the business reported losses worth VND37 billion (US$1.6 million) but not until one year later did the corporation decide to arrange meetings and work on resolution on “manufacture orientation” with the view to become profitable in 2016.
According to the Inspectorate of the Ministry of Industry and Trade, between 2010 and 2013, although sales of goods and services of VM amounted to nearly VND8 trillion (US$343 million), the company posted a loss of VND331.8 billion (US$14.2 million).