Strong dollar improves car import profits
Strong dollar improves car import profits
Local auto import distrbutors could record high growth in the second half of the year as the US dollar has recently raised its value against other foreign currencies.
The Japanese yen has dropped 13.2 per cent compared with the US dollar since the beginning of this year, and that difference may increase after the Federal Reserve System (FED) raises the interest rate in September.
Moreover, the State Bank of Viet Nam (SBV) has committed to keep the exchange rate between the US dollar and the dong stable within a margin of 2 per cent.
Such moves have strengthened the dong against the Japanese yen and benefited those who use the yen and US dollar to import cars.
Truong Long Engineering and Auto Joint Stock Company (HTL) – a business that imports and distributes Japanese Hino trucks and auto parts – improved its combined profit margin from 9.2 per cent in the fourth quarter of last year to 11.1 per cent in the second quarter of this year.
In the first six months, HTL recorded a net profit of VND62.3 billion ($2.86 million), six times the company's profit in the first half of last year. Its shares rose from VND26,000 on January 5 to VND93,000 at the end of yesterday's session.
Two companies, TMT Motor Joint Stock Company (TMT) and Hoang Huy Investment Services Joint Stock Company (HHS), used US dollars to import completely built cars and improved their business results in the first half.
TMT recorded a net profit of VND143 billion ($6.56 million) in the first half – seven times the company's figure last year. HHS earned a net profit of VND335.6 billion ($15.4 million) after the first six months, and its shares rose from VND17,600 at the beginning of this year to VND22,000 after yesterday.
Viet Dragon Securities Corporation (VDSC) said HHS and TMT expected to achieve high sales growth in the last two quarters after HHS expanded the distribution of US international freight trucks and TMT started to distribute the Indian TATA travelling buses.
According to the Viet Nam Auto Manufacturers' Association (VAMA), the auto sector's sales increased 58 per cent in the first half over last year's first half. This includes increases of 136 per cent, 75 per cent and 45 per cent for sales of trucks, business vehicles and travel buses, respectively.
