VinFast Auto Ltd. has announced a significant increase in losses for the second quarter of this year, primarily driven by a higher impairment charge. The Vietnamese automotive company disclosed a net loss of 18.76 trillion dong ($762 million) for the quarter, reflecting a significant jump from the loss of around 13.4 trillion dong reported in the same period last year. Despite this, the firm also recorded a revenue increase of 9% to 8.67 trillion dong.
The company attributes the loss primarily to an impairment charge on net residual value amounting to $104 million, significantly higher than the $5 million recorded in the previous quarter. This charge marks a strategic decision to adjust the valuation of certain assets, impacting the financial performance for the quarter.
VinFast delivered 13,172 electric vehicles in the second quarter, reflecting a year-over-year increase of 43%. Furthermore, the total number of vehicle deliveries for the first half of the year reached 22,348 units, showcasing a substantial rise of 101%. Notably, a significant portion of the vehicles delivered in Q2 were to related parties, accounting for 51% of the total figure.
Chairwoman Le Thi Thu Thuy acknowledged that the company, as a startup, anticipates ongoing losses in the near term as they focus on expansion and growth. VinFast's founder and CEO, Pham Nhat Vuong, expressed strong confidence in the company's trajectory during an interview with Bloomberg TV, reinforcing his commitment to its success.
Looking ahead, VinFast is positioning itself as a global brand with plans to penetrate up to 50 international markets. Despite a slowdown in the global electric vehicle sector, the company remains steadfast in its ambitions. Initiatives such as the upcoming India factory and the recently initiated assembly plant in Indonesia underscore VinFast's commitment to international expansion.
While the domestic market in Vietnam continues to drive the bulk of revenue, the company sees international markets as crucial for its long-term growth strategy. VinFast currently operates 155 showrooms across various markets, with around 70% representing dealership locations.
In conclusion, while facing challenges in the near term, VinFast remains focused on solidifying its global presence and expanding its distribution network. The company's visionary approach and strategic investments signal a commitment to sustainable growth and market leadership in the evolving automotive landscape.