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Vingroup lost USD1 billion last year in manufacturing due to poor sales of VinFast vehicles, EV investments

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Vingroup, the parent company of VinFast, posted a pre-tax loss of around 23.9 trillion Vietnamese dong (around USD1 billion or RM4.4 billion) at its manufacturing segment last year, according to a report by Nikkei.

The loss was attributed to poor sales of internal combustion engine (ICE) cars in Vietname as well as growing investments in the company’s electric vehicle business. Last year, sales of VinFast ICE cars amounted to 35,700 units, which represents a 20% year-on-year increase from 2020. Despite this, the group’s assembly plant in Cat Hai, Hai Phong, which began operations in 2019, is operating well below its capacity of 250,000 vehicles a year.

VinFast has already said it will stop making ICE-powered cars and transition to become fully electric by the end of 2022. On the electric vehicle (EV) front, Vingroup revealed that VinFast had received nearly 40,000 pre-orders for its EV models after less than four weeks of launch.

The VF e34 is the brand’s first EV model and was launched in 2021. This year, the company will introduce the VF5, VF8 and VF9, while from 2023 onwards, there will be the VF6, VF7, a new sedan model as well as other future models or derivatives.

The push for EVs will see Vingroup invest considerably, including to set up a battery plant as well as establishing sales networks in the United States and Europe. Pham Nhat Vuong, the founder and chairman of Vingroup, told local media that further losses in the automotive business are anticipated in the near term.

Looking at Vingroup’s overall financial performance, the conglomerate recorded a consolidated net loss of roughly VND7.5 trillion (around RM1.38 billion), a first and a significant departure from the VND4.5 trillion (around RM829 million) profit in 2020.

The post Vingroup lost USD1 billion last year in manufacturing due to poor sales of VinFast vehicles, EV investments appeared first on Paul Tan’s Automotive News.

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