VinFast experiences strong revenue growth in 2023

VinFast Auto Ltd. (Nasdaq: VFS), a subsidiary of Vingroup and a leading electric vehicle manufacturer in Vietnam, has announced its unaudited financial report for the fourth quarter and full year 2023, ending on December 31, 2023.

Revenue for the fourth quarter reached VND 10,418 billion ($437 million), an increase of 26% from the previous quarter and 133% from the same period in 2022.
The significant increase in profitability was due to cost optimization.
Full-year revenue reached VND 28,596 billion ($1.198 billion), a 91% increase from the previous year.
The company aims to have approximately 400 global sales points by the end of 2024.
The company is increasing its competitive capacity in potential markets near Vietnam, such as Indonesia and India.
The company aims to deliver 100,000 vehicles in 2024.
The implementation of cost optimization plans will further improve profit margins.

Ms. Le Thi Thu Thuy, Chairman of VinFast’s Board of Directors, shared: “2023 was a successful year with many first milestones for VinFast, with the highlight being the listing event on the US exchange. We have introduced exciting new products, expanded our distribution network, consolidated our position in existing markets, and opened up opportunities in key potential markets. These efforts have recently yielded positive signals in markets such as the US and Indonesia. Building on this growth momentum based on a solid foundation, we aim to deliver 100,000 vehicles in 2024, reaffirming our commitment to creating a greener future for all.”

Ms. Nguyen Thi Lan Anh, CFO of VinFast, affirmed: “In Q4 2023, VinFast recorded significant revenue growth and improved gross margins. We will continue to focus on enhancing investment efficiency and strengthening the balance sheet through continued optimization of production costs, BOM costs, and global capital investments (Capex). This will be a crucial support for VinFast in expanding into markets, especially potential markets such as Indonesia and India, thereby driving strong sales growth.”

Revenue growth and improved gross profit margin compared to 2022

VinFast delivered a total of 34,855 electric vehicles in the 2023 financial year, marking a 374% increase from the previous year. In the fourth quarter alone, the number of deliveries was 13,513 vehicles, a 35% increase from the previous quarter.

Despite a slight decrease compared to Q3, the number of electric motorcycles delivered in Q4 still grew by 48% compared to the same period last year, bringing the total number of delivered vehicles for the year to 72,468.

VinFast’s total revenue in Q4 reached VND 10,418 billion ($437 million), a 26% increase from the previous quarter and a 133% increase from the same period in 2022, driven by an increase in sales volume and a diverse product range.

For the full year, VinFast’s total revenue reached VND 28,596 billion ($1.198 billion), a 91% increase from the previous year.

After deducting costs, VinFast recorded a gross loss of VND 4,174 billion ($174.9 million) in Q4 and a gross loss of VND 13,164 billion ($551.6 million) in 2023.

VinFast’s gross profit margin significantly improved compared to 2022, from -82% to -46%. Meanwhile, the gross profit margin in Q4 improved from -82.6% to -40.1%.

As planned, VinFast’s Q4 capital expenditure (Capex) was $213 million, mainly used for the development of VF 6, VF 7 models, the construction of a plant in North Carolina, showroom development, and charging stations.

Expanding distribution network and product range, establishing a solid foundation for future development

In 2023, VinFast accelerated its development with a multi-directional strategy, including transforming and expanding its global retail network, diversifying its product range, and enhancing production capacity to establish a solid foundation for 2024 and long-term development goals.

In terms of product launches, VinFast introduced four new SUV models in Vietnam across various segments, including the flagship VF 9, VF 5, VF 6, and VF 7. The VF 6 model, launched in October in Vietnam, has exceeded initial sales expectations.

In Q4, VinFast made an important transition from a direct-to-consumer distribution model with heavy investment costs to a more cost-effective hybrid model by leveraging existing distribution infrastructure, through the establishment of 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 registered dealers participating in the network. The company is expected to achieve approximately 130 sales points in North America and 400 sales points worldwide by the end of 2024. Dealer sales are expected to contribute significantly to sales in the second half of 2024.

Focus for 2024: Increasing revenue and cost optimization

In the 2024 financial year, VinFast aims to balance revenue growth and cost optimization, based on cost optimization of production and materials, as well as strategic investments in potential markets in the region.

To boost electric vehicle sales, VinFast will expand distribution channels by leveraging the network and expertise of dealers in each market.

The unique battery leasing policy of VinFast can significantly boost sales in new markets. This mechanism helps reduce the initial sale price and monthly operating costs of VinFast vehicles, making them more competitive compared to 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 after launching each vehicle model; partly through technical efforts such as redesigning components and optimizing platforms, and the rest through supply and procurement initiatives such as internalization and supplier switching. In addition, VinFast will continue to optimize production costs and other expenses.

Business outlook

VinFast aims to deliver 100,000 vehicles in 2024 through an expanding distribution network. The brighter macroeconomic prospects also support the implementation of the company’s development strategies.

VinFast enters 2024 with positive signals. In California, the direct sales channel has seen a significant increase in order volume in January and February, indicating early momentum in the US market.

After establishing a foundation in markets such as the US, Canada, and some European countries, VinFast’s global expansion plan for 2024 will focus on other global markets, including potential markets near Vietnam such as Indonesia and India. This step is consistent with the strategy of optimizing capital costs, including optimization of production and material costs (BOM) targets.

TT (Tuoitrethudo)