Tasco Auto Joint Stock Company (Tasco Auto JSC), a leading automotive distributor in Vietnam, has announced its investment strategy to convert certain affiliated companies into subsidiaries and to increase its ownership in highly efficient subsidiaries. This move is part of Tasco Auto’s strategy to focus on strengthening its core business efficiency and investments.
Specifically, Tasco Auto has invested in Toyota Ly Thuong Kiet Co., Ltd., a former afflilated company to increase its ownership from 35% to 65%, tuning it into a subsidiary. Toyota Ly Thuong Kiet is a crucial component, generating revenue of VND 2,102 billion in 2022. Despite facing auto industry challenges in 2023, the company still demonstrated resilience with a revenue of VND 1,298 billion. In the first half of 2024, Toyota Ly Thuong Kiet experienced a strong rebound with revenue increasing by 36.67% compared to the same period last year.
Tasco Auto, through its subsidiary, has also invested in Savico Investment JSC (SVCi) to increase its ownership from 40% to 100%. SVCi currently owns a building at 66-68 Nam Ky Khoi Nghia Street, Ho Chi Minh City, which is currently being utilized for leasing business operations.
Tasco Auto has also increased its ownership in its existing subsidiaries, raising its stake in Binh Duong New City Auto Services JSC (Binh Duong Ford) to 94%, in Nam Song Hau Auto JSC (Honda Can Tho) to 87%, and in Binh Dinh Auto JSC (Hyundai Binh Dinh) to 71%. Previously, Tasco Auto’s ownership in these companies was over 50%.
These subsidiaries are highly profitable and contribute significantly to Tasco Auto’s overall revenue and profits. For instance, Binh Duong Ford achieved revenue of 1,563 billion VND in 2023. The company consistently maintains a high Earnings Per Share (EPS), with an impressive VND14,500/share in 2022. Its Return on Sales (ROS) has remained consistently above industry average, ranging from 3% to 5%, partly due to its strong market position in a high-growth area and its excellent, efficient after-sales services. Binh Duong Ford has been recognized as the Outstanding Dealer of the Year in Group A in 2022 and has won the Best Service Award from Ford Vietnam. Similarly, Honda Can Tho and Hyundai Binh Dinh have also demonstrated strong business growth, with the 1H2024 after-tax profits increasing by 120% and 150% yoy respectively.
According to the Board of Directors’ resolution, the conversion of affiliated companies into subsidiaries and the increase of ownership in high-performing subsidiaries, rather than investing in new external companies, is part of Tasco Auto’s strategy to restructure its existing portfolio. This strategy aims to strengthen business efficiency and core investment activities. The decision is also intended to optimize management operation, scale up successful models, and enhance the overall effectiveness of the entire system. The planned transactions are expected to be completed by the 3rd quarter of 2024. Previously, Tasco Auto also acquired 100% of Sweden Auto’s shares, which is the exclusive importer and distributor of the luxury car brand Volvo in Vietnam. Volvo is internationally recognized as the safest car brand, achieving a perfect score of 10 based on criteria from the National Highway Traffic Safety Administration (NHTSA) and the Insurance Institute for Highway Safety (IIHS). Tasco Auto is advancing upstream in the automotive value chain with a CKD (Completely Knocked Down) assembly plant project, in partnership with one of the top 10 global OEM manufacturers. The product launch is expected in 2025.
