The company reported a deficit nearing 93 billion VND ($3.8 million), contrasting starkly with a modest profit of 140 million VND in the same quarter of the previous year.

Over the first nine months of the year, accumulated losses reached almost 192 billion VND, a stark comparison to the 2.4 billion VND profit seen in the same period last year, equating to approximately 52% of the company's registered capital.

Previously, TMT had experienced losses in Q2 and Q4 of 2023 and Q2 of 2024, with minimal profits in other quarters. In Q1 2024, profits were just under 270 million VND, roughly the cost of a single Wuling electric vehicle.

TMT Motors attributed its financial troubles partly to the broader economic climate, citing tightened consumer spending amid inflation concerns and a struggling real estate market. Internally, the company faced challenges from substantial financial expenses due to large inventory levels, further impacting production and operational costs.

Financial reports indicate that TMT, led by Chairman Bui Van Huu, sold vehicles below cost, leading to negative gross profits. For Q3 2024, TMT's revenue exceeded 352 billion VND, yet the cost of goods sold surpassed 393 billion VND. This imbalance resulted in losses even before considering financial, marketing, administrative, and tax expenses.

TMT’s struggles over the past two years have been exacerbated by sluggish demand in the overall auto market. The company’s ambitious plan to sell the Chinese-made Wuling Hongguang MiniEV, a budget-friendly electric car, fell short of expectations. Although this vehicle was once the world's best-selling compact car for four consecutive years (2020-2023), TMT faced difficulty generating significant sales at its starting price of 239 million VND.

In 2023, the company sold only 591 units of the Wuling Hongguang MiniEV, far below its target of 5,500 units. For 2024, the sales goal was set at 1,016 units, reflecting a continued struggle to establish the brand in the competitive market.

The electric vehicle market in Vietnam is fiercely competitive, with major players such as VinFast, led by billionaire Pham Nhat Vuong, ramping up production and distribution. International brands like China’s BYD have also joined the market, adding to the challenges faced by TMT.

TMT Motors has responded to its financial difficulties by implementing a series of measures, including asset sales, workforce reduction, and a comprehensive restructuring of its product lineup and operations. The company aims for sustainable growth and hopes to reach a revenue target of 2.645 trillion VND in 2024, with a post-tax profit exceeding 38.5 billion VND.

Auditors have highlighted TMT's accumulated losses and short-term debt exceeding current assets by hundreds of billions of VND, raising questions about the company’s ongoing viability. Nonetheless, TMT remains committed to collaborating with international partners to find competitively priced electric vehicle options suited to the Vietnamese market.

Manh Ha