Vinataxi and Savico Taxi to merge to compete with Grab
13:00 | 18/06/2018 Print Article
Backed by ComfortDelGro Corporation Limited from Singapore, the merger between Vinataxi and Savico Taxi may help them overcome the competition with Grab and other ride-hailing applications.
|Vinataxi has pegged great expectations on the merger |
Most recently, the representative of Vietnam Taxi Company (Vinataxi) has announced the plan to merge with ComfortDelgro Savico Taxi—the taxi brand that had to suspend operations in March due to heavy competition.
Vinataxi currently holds the third largest market share in the taxi sector in Ho Chi Minh City. Despite the firm claiming that its taxi business has not been much affected by Grab’s presence, its 2017 profit was only 10 per cent of the annual target. Notably, last year Vinataxi reported VND48.7 billion ($2.13 million) in revenue and VND1.2 billion ($52,553) in after-tax profit, equalling 49.8 and 9.87 per cent of the yearly targets.
The representative of Vinataxi expects that the merger with Savico Taxi will help increase revenue and profit from taxi business by six times compared to 2017.
Vinataxi was established in October 1992 by Tecobest Investment Ltd. (Hong Kong ) and Tracodi. In 2003, the Hong Kong partner transferred its holding to ComfortDelGro Corporation Limited from Singapore, one of the world's largest land transport firms.
|Vinataxi was established in October 1992 by Tecobest Investment LTD (Hong Kong ) and Tracodi. In 2003, the Hong Kong partner transferred its holding to ComfortDelGro, one of the world's largest land transport firms. |
Once Vinataxi merges with Savico, ComfortDelGro Corporation Limited will be a common backer to both.
However, there are concerns that Vinataxi’s optimism is misplaced as Savico might not give it the expected boost, especially after it had to suspend operations due to competition.
Savico reported bleak business results prior to the suspension. Notably, according to Savico’s 2017 financial report, the taxi joint venture had total assets of VND92 billion ($4.038 million), however, its after-tax profit was VND235 million ($10,316) only. Previously, in 2016, its pre-tax profit was VND4.1 billion ($180,000), equaling 53 per cent of its plan for the whole year.
According to Savico, the purpose of ComfortDelgro Savico Taxi’s decision was to look for other business opportunities as well as safeguard the capital that Savico and ComfortDelgro contributed to the joint venture.