Vinfast acquires GM Vietnam, gears up to ‘made-in-Vietnam’ dream

Created 06 July 2018
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Obtaining a large distribution network with 22 sale agents and a factory in Hanoi with 300 workers after the takeover of GM Vietnam, Vinfast has taken a big step in the automobile race.

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The domestic automobile industry is taking shape with three big names – Vinfast, Truong Hai and Thanh Cong.

How is GM doing in Vietnam?

According to the Vietnam Automobile Manufacturers Association (VAMA), in 2017, GM sold 10,576 Chevrolet cars, holding 4.2 percent of the Vietnamese auto market, a modest figure compared with rivals.

Obtaining a large distribution network with 22 sale agents and a factory in Hanoi with 300 workers after the takeover of GM Vietnam, Vinfast has taken a big step in the automobile race. 

With 4.2 percent of market share, Chevrolet remains a ‘small manufacturer’. In terms of car sales, Chevrolet is just equal to 1/5 of Toyota and Thaco (which has KIA, Mazda and Peugoet brands), equal to Honda and higher than Mitsubishi, Nissan, Suzuki and Isuzu.

However, Chevrolet has been developing steadily in Vietnam. GM sold 7,300 cars in 2015, up by 43 percent over 2014. 

In 2016, it sold 9,700 cars, holding 3.2 percent of market share. In 2017, the sales reached record high – 10,576, up by 8.5 percent, and gaining 3.9 percent of market share.

The Corolado pick-up is the best seller of Chevrolet. Around 3,082 Corolados were sold last year. Corolado ranked second among pick-up models, after Ford Ranger.

Chevrolet has made an impressive deal in the SUV market segment when bringing Trailblazer to Vietnam and selling at the surprisingly low price of VND80 million. In the first month after launch, 164 Trailblazers were sold.

With more than 100 years of experience, GM with its Chevrolet brand is facing problems with its business all over the world.

In the 2017 fiscal year, GM reported a loss of $3.9 billion. It had net profit of $1 billion in the first quarter of 2018, a sharp fall of 60 percent from the $2.6 billion of the same period last year.

GM was once on the brink of bankruptcy with huge debt of $172.8 billion, but it was rescued thanks to the US government’s $50 billion bailout.

To many people, the move of Vinfast taking back GM is a big surprise, because Vinfast once worked closely with BMW to make cars.

However, analysts believe Vinfast has every reason to do this.

Vinfast will take over GM’s sales agent network, including eight agents in the north, three in the central region and 11 in the south. Large distribution networks are important to manufacturers to boost sales.

Vinfast will continue developing the factory that makes Chevrolets. It may undertake the production of some car parts as part of Vinfast’s plan to lift the localization ratio to 60 percent by 2025.

 

Source: Mai Thanh - Bridge

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