Toyota, Honda making big bucks in Vietnam

August 04, 2016 | 08:45
(0) user say
Japanese automobile makers Toyota and Honda earned VND trillions in profit in Vietnam over the past four years.

Numbers collected from Vietnam Engine and Agricultural Machinery Corporation (VEAM), a joint venture associate of Honda and Toyota, showed that the two companies saw year-on-year growth in revenue and profit in the 2012-2015 period.

Honda Vietnam Company Limited’s revenue and profit skyrocketed between 2012 and 2015. The company’s produced an almost sevenfold revenue, boosting its figures from VND11 trillion ($500 million) in 2012 to VND70 trillion ($3.1 billion) in 2015. Honda’s profits were below VND2 trillion ($90 million) in 2012 but rose to VND10 trillion ($450 million) by 2015.

Honda Vietnam currently accounts for a 4.7 per cent market share for cars and 70 per cent for motorbikes.

Toyota Motor Vietnam earned revenue of VND15 trillion ($672 million) in 2012. By 2015, the figure reached VND33 trillion ($1.47 billion), more than doubling over a short four years. Profit in 2012 stood at VND1 trillion ($44.8 million), which quintupled by the end of the last financial year to reach VND5 trillion ($224.2 million). Toyota currently accounts for 25.5 per cent of the domestic car market.

The potential for both revenue and profit to continue growing is very high for both companies. In recent years, the car market has been producing double-digit growth. The percentage of households owning cars is still relatively low at 10 per cent in Vietnam, compared to the Philippines’ 53 per cent, Indonesia’s 54 per cent, and Malaysia’s 93 per cent. As the lending interest for car buyers is stable and the government has issued many policies that make it easier to own cars, such as decreasing the ownership fee, coupled with a marked rise of incomes, the number of cars is poised to increase.

According to its commitments in the ASEAN Trade in Goods Agreement, Vietnam is going to eliminate the import tariff on cars from the ASEAN by 2018.

Toyota and Honda are part of the group of auto manufacturers requesting more incentives from the Vietnamese government. According to the group, the domestic automobile industry is not able to compete with imports in terms of price. Toyota earlier alluded to the possibility of closing shop in Vietnam if the government does not agree to the proposal.

Toyota Vietnam recalls imported Lexus for brake problems
Toyota Vietnam promotes traffic safety
Toyota gives medical equipment to hospitals in Ha Giang
Toyota awards scholarship for Vietnamese Young Music Talent 2015
Honda Vietnam celebrates 10 years of fostering young Vietnamese talents
Toyota awards 115 scholarships to excellent science technology students
Toyota Vietnam to bring eco-friendly cars to Vietnam Motor Show 2015
Toyota Vietnam fails to deliver promise after 20 years, asks for more incentives
Honda Vietnam at odds with ministry over almost $10mn tax arrears
Toyota Vietnam awards $21,000 in scholarships
Toyota opens second Lexus dealer in Vietnam
Toyota Vietnam launches the all-new Corolla Altis 2014
Toyota gears up for classical music tour
Honda Vietnam head promoted, to leave Vietnam
Toyota Vietnam recalling 126 sedans over valve spring defect
Toyota Vietnam joins Japan Monozukuri and Supporting Industry Exhibition
Honda City wins 220 orders after debut
Toyota Vietnam opens new dealer in Hanoi
Toyota to recall 5,300 cars in Vietnam
Toyota Vietnam - “Moving people” with Vietnam Motorshow 2012
Toyota Vietnam to recall 320 Camry 3.0 cars to check defect
Toyota Vietnam responds to whistle-blower proceedings
Honda Vietnam produces 10 millionth motorcycle
Honda Vietnam threatens to reconsider investment plan in Vietnam
Toyota Vietnam revives mobile vehicle service
Honda Vietnam to build third motorbike plant
Toyota Vietnam announces production recovery plan

By By Hong Trang

What the stars mean:

★ Poor ★ ★ Promising ★★★ Good ★★★★ Very good ★★★★★ Exceptional