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Summary of 2015 activities

In 2015, Vietnam's economy had good growth; GDP reached 6.68%, the highest level since 2011. Besides, along with the development of transport infrastructure and car load controlling policies, the automotive market has had an impressive growth with the total market sales of over 245,000 vehicles, up 55%. With these advantages, THACO continued to maintain its "Top position in Vietnam automobile market" with a total of 80,421 vehicles sold (including 36,300 trucks and dump trucks; 1,908 buses, and 42,213 passenger cars), increasing by 90% compared to 2014, leading the country with 38.6% of market share of Vietnam Automobile Manufacturers' Association and 32.8% of the market share of the nationwide car market. Its total revenue reached 45,800 billion VND, equivalent to 2 billion USD, up 89% compared to 2014. This is the fully consolidated result of THACO value chain from production, assembly, and freight forwarding to car distribution, sale and after-sales service. After-tax profits reached 7,038 billion VND. Total contribution to the national budget in 2015 was 13,856 billion VND, double the amount in 2014, in which contribution to Quang Nam province was 10,096 billion VND.
 
Preparing for the ASEAN regional integration in 2018, THACO develops its 2016-2018 strategy with the following objectives: To build the fundamental and essential values for integration; to develop THACO as a diversified industrial conglomerate which takes auto production & sales as its mainstream and a Vietnam enterprise leading the ASEAN region. THACO sets out its 2018 sales target of 150 thousand vehicles with revenue of over 95 trillion VND. To implement the above strategy, THACO will invest in developing Chu Lai - Truong Hai Auto Machinery Industrial Park on par with ASEAN level through joint venture and cooperation with partners having the right technology to create products that meet international standards and participation in the global value chain.

THACO implements the following key projects at Chu Lai - Truong Hai Complex: New Mazda car plant with the capacity of 100,000 vehicles/year, new truck plant with the capacity of 100,000 vehicles/year and complete change in advanced design technology to improve bus quality towards international standards and export, mini bus (12-16 seats) production and business, supporting industrial factories cluster to supply components to assembly factories for local market and export. In addition, THACO expands Chu Lai - Truong Hai port, dredging the port to establish direct sea transport routes from South Korea, Japan, and China to Chu Lai.

The company continues to re-organize the affiliated Showroom system, standardize recognition, and upgrade management in order to ensure the consistence and good performance which bring the best value to the customers. It is expected that 2,606 billion VND will be invested to develop new showrooms. Besides, supporting industries, infrastructure logistic services and social facilities will be developed to attract investors. Total expected investment for 2016-2018 phase is 30,110 billion VND, including 20,372 billion VND for Chu Lai Complex and 9,738 billion VND for the distribution and retail showroom system.

2016 business plan

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In 2016, the market is predicted to continue to growing by around 20%, THACO Shareholders' General Meeting also approved the business plan in 2016 with a total of 112,336 vehicles, up 40% compared to 2015. In this figure, passenger cars are 62,083 vehicles, up 47% compared to 2015, accounting for over 28% of the domestic passenger car market share, KIA cars: 28,015 vehicles, up 31%; Mazda cars: 33,060 vehicles, up 62%; and Peugeot cars: 1,008 vehicles, up 85%. Mazda and Kia cars rank the 2nd and 3rd place respectively in Vietnam market. Mazda and Kia car sales is 61,075 vehicles, accounting for 28% of the market share, leading Vietnam car market. Commercial vehicles sales is 50,253 vehicles, up 32% compared to 2015, accounting for 45% of the commercial vehicle market in the country, focusing on increasing sales and market share of heavy trucks and dump trucks, tractors, and specialized vehicles.

With the above plans, THACO increases its total assets to 46,220 billion VND, total consolidated revenue to 71,735 billion VND, equivalent to 3 billion USD, after-tax profits to 8,212 billion VND, total contribution to national budget to 20,018 billion VND, in which contribution to Quang Nam province is 15,178 billion VND. Margin is 12.8%/revenue, in which margin of showroom and retail system accounts for 2%. Distribution and forwarding margin reads 3.7% and profit margin of production in Chu Lai Open Economic Zone accounts for 7.1%. If the current corporate income tax rate is 20%, the corporate income tax payable in Chu Lai is 1.250 billion VND. However, due to the incentives under the mechanism of Chu Lai-Quang Nam Open Economic Zone, the corporate income tax payable in the Complex for 2016 is 244 billion VND after tax incentives. Then, the tax savings in 2016 is about 1.006 billion VND for reinvestment.

As of April 2016, THACO has had 13,694 employees and the expected personnel to 31 December 2016 will be 17,873 people (up 31% over the same period in 2015). The Meeting also put forward the orientation of high quality human resources development in preparation for the regional integration in 2018, management system establishment according to the corporation model, business sectors specialization, and professionalism improvement for the employees to meet the development demands.