Founded in 2018 and earlier threatened to go publicly to the United States in the second half of this year, VinFast, a Vietnamese luxury car brand, has recently reported quite unfavorable news, and its parent company Vietnam Vingroup Group recently released its 2021 financial report, which pointed out that its VinFast business suffered huge losses due to poor new car sales, with a pre-tax loss of up to $1 billion for the whole year.
According to the Japanese financial media Nikkei Shimbun, Vingroup pointed out in the earnings report that its VinFast car brand suffered a total loss of 23.9 trillion VND (US$1 billion) in the production and manufacturing of vehicles last year because of its less than expected sales in Vietnam, coupled with the group's increased investment in the research and development of pure electric vehicles (EVs).
The earnings report said that VinFast's new cars equipped with traditional internal combustion engines sold only about 35,700 vehicles last year, although it increased by about 20% compared with 2020, but because the brand's research and development and investment amounts in the same period were huge, it could not create profits.
According to the data, VinFast currently has two automobile production lines in CatHai and HaiPhong, Vietnam, and the maximum output of these two production lines in 2019 is 250,000 units per year, but with VinFast's current sales, the utilization rate of these two production lines is even less than 15%.
In any case, VinFast has earlier announced that the brand will phase out traditional internal combustion engines and is expected to fully transition to a pure electric vehicle brand by the end of this year, and the brand's first pure electric EVVFe34 was also released last year, and the new car orders it has received are said to have reached nearly 40,000.
Interestingly, if we look back at Vingroup's financial report in 2020, the group actually recorded a profit of 4.5 trillion VND in 2020, but in 2021, because the group increased investment in EV technology research and development and production lines, it suffered huge losses in fiscal 2021.