“Mercedes Kingpin” Haxaco Aims to Capture 40% of MG Car Market in Vietnam
Vietnam’s leading automotive company, Haxaco, has set its sights on dominating the local MG car market with a target of capturing 40% market share. Haxaco plans to achieve this by expanding its operations and diversifying its product portfolio, while also establishing a long-term strategy. A key aspect of this strategy involves expanding its distribution network to include the renowned MG brand.
Seizing the Market Opportunity
Haxaco has already entered the used car market, with two exclusive dealerships for MG cars located in Kinh Duong Vuong and Lang Ha. Mr. Dung, the CEO of Haxaco, has boldly declared that the company intends to secure a maximum of 40% market share for MG cars by investing in all ten dealerships without relying on bank loans. This ambitious approach, coupled with a dedicated sales team of approximately 500 employees, demonstrates Haxaco’s commitment to success.
The decision to enter the MG car market is based on its promising prospects in Vietnam. With the luxury car segment facing challenges, including Haxaco’s own success in capturing 40% of the Mercedes-Benz market, the lower-end MG segment presents untapped potential. In times of economic downturn, the MG brand, which currently operates in one of the lowest segments in Vietnam, is expected to thrive.
Ambitious Profit Targets and Shareholder Benefits
In 2024, Haxaco aims to achieve a consolidated profit before tax of 200 billion VND, a staggering 4.2 times more than the previous year’s low of 48 billion VND. To distribute profits, shareholders have approved a plan that includes a cash dividend and stock bonuses for existing shareholders, totaling 18% of the company’s shares.
Specifically, the company plans to distribute a 3% cash dividend (300 VND per share) and award existing shareholders an additional 15% in the form of stock bonuses. The funds for this distribution will come from the undistributed after-tax profits and surplus share capital. The issuance of an additional 14 million shares is expected in the second and third quarters of 2024, increasing the company’s charter capital to 1,074 billion VND.
Challenging Times for Mercedes-Benz in Vietnam
Looking back at 2023, Mercedes-Benz Vietnam witnessed a decline in performance, with a 41% drop in revenue to 3,982 billion VND, the lowest figure since 2018. Pre-tax profits also plummeted by 84% to 48 billion VND, representing only 15% of the 2023 plan.
The challenging market conditions in 2023, characterized by a recession and tightened consumer spending, were the main factors contributing to the sharp decline in car sales. Additionally, high interest rates and difficulties in securing loans have made it challenging for consumers to finance their car purchases. In response to these market challenges, car manufacturers and dealerships have intensified competition through the launch of new products and various discount programs.
As Haxaco positions itself to capture a significant portion of the MG car market, the company demonstrates its resilience and adaptability in seizing market opportunities. With a solid track record and an astute business strategy, Haxaco is well-positioned to shape the future of the automotive industry in Vietnam.
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