Distributor of Wuling electric cars continues to face deep losses
Distributor of Wuling electric cars continues to face deep losses
The company reported a loss after tax of VNĐ120.8 billion, marking the third consecutive quarter of losses.
Wuling's mini electric car models. — Photo tmt-vietnam.com |
TMT Motors, the distributor of Wuling electric vehicles, has recently released its 2024 company management report, revealing a challenging financial landscape.
The company reported discouraging figures in its fourth quarter 2024 financial statement, with a 1.8 per cent decrease in quarterly revenue to VNĐ649.2 billion (US$25.7 million).
Operating at a loss due to the cost of goods sold, TMT Motors recorded a gross loss of over VNĐ42 billion.
After deducting expenses, the company reported a loss after tax of VNĐ120.8 billion, marking the third consecutive quarter of losses. It posted a loss of VNĐ287.6 million in the same period last year.
For all of 2024, TMT Motors earned net revenues of over VNĐ2.3 trillion, a 12 per cent decline from the previous year.
Consequently, the company faced a substantial loss after tax of VNĐ315.5 billion, a significant downturn from its VNĐ4 billion profit in 2023, marking a record loss in its operational history.
The company attributed these financial challenges to an overall economic climate rife with obstacles, such as a stagnant real estate market, tightened consumer spending and a technological shift leading to a drastic reduction in automobile demand.
Despite implementing a comprehensive restructuring plan covering products, suppliers and business operations, TMT Motors struggled to navigate the tumultuous economic environment.
To mitigate losses, the company strategically sold off its entire inventory of outdated, overpriced and unpopular car models, reducing the inventory value from VNĐ1.4 trillion to VNĐ490 billion.
Additionally, TMT Motors revamped its supplier network, focusing on enhancing post-sales service professionalism.
In the electric vehicle segment, TMT Motors has prioritised competitive pricing for selected products.
Although it aimed to sell 5,000 electric vehicles annually upon market entry, the company fell short of expectations. In the latter half of 2023, only 591 units of the Wuling Mini EV were sold, although the number increased to 1,358 units in 2024.
In response to these challenges, TMT Motors has adjusted its 2025 business plan, setting a goal of selling 3,404 electric vehicles. The company aims to achieve revenues of over VNĐ3.8 trillion and profit after tax nearing VNĐ300 billion.
Despite its significant losses last year, TMT Motors remains optimistic about the year ahead.
It is focused on restructuring and adjusting its business plans, particularly in the electric vehicle segment, with hopes for a resurgence in 2025.
In a recent update, TMT Motors, in collaboration with joint venture partner SGMW (SAIC – General Motors – Wuling), has expanded its range of competitive new electric vehicle models.
The company plans to import and manufacture these new models at its plant from 2025 onwards.
