VinFast may become profitable much sooner than anticipated. The Vietnamese carmaker will be adopting an asset-light model, which will see a new corporate entity absorb its manufacturing operations. This will effectively allow VinFast to relieve much of its debt obligations and realign its focus to more long-term business developments and innovations.
These include expanding to other global markets, research and development, and product engineering. With less burden on capital management, VinFast’s financial position would improve exponentially, and profits could come in as early as 2027.
The restructuring will start with the newly formed VinFast Trading and Production (VFTP) joint-stock company (JSC). This corporation will be taking over VinFast’s Hai Phong and Ha Tinh factories, all of which are valued at around $530 million, while also assuming around $7.3 billion more in manufacturing-associated liabilities.
VFTP will then be transferred to an investor group, led by another JSC in Future Investment and Development Research (FIDR). With VFTP under its belt, FIDR will remain committed to building VinFast vehicles. And together with the carmaker’s head offices, both will ensure that quality is kept under the current standards, and that after-sales operations and customer service systems are well supported.
VinFast vice CEO, Thai Thi Thanh Hai, summarized the initiative, saying: “VinFast will continue retaining its global manufacturing operations, while in Vietnam, Future will manufacture vehicles under contract for VinFast. The remaining operations are outside the scope of this transaction, remain under VinFast, and continue operating normally.”
Ultimately, FIDR may also help Vietnam’s overall vehicle manufacturing industry, as it will be able to engage with other automakers. The carmaker believes that its home country could eventually join the ranks of Thailand and Indonesia in automotive assembly and export.
Made in partnership with VinFast Philippines.
