From The Motley Fool · The Motley Fool Team · · 40s
VinFast Shifts to Asset-Light Model
VinFast cuts fixed costs by moving manufacturing to Vietnam to fund EV growth.
In brief
VinFast cuts fixed costs by moving manufacturing to Vietnam to fund EV growth. VinFast uses asset-light manufacturing in Vietnam to lower costs and fund software development for electric vehicles. Originally reported by The Motley Fool.
Asset-Light Manufacturing Model
VinFast moved manufacturing assets to Vietnam to reduce plant depreciation and debt expenses while keeping production capacity through supplier agreements.
“Moving to an asset-light manufacturing model allow us to allocate more capital to technology, product and international expansion while maintaining control over the capabilities that are critical to our long-term competitiveness”
Real Estate Investments
VinFast acquired a 20% economic interest in Hanoi International Sports Urban Area to generate secondary revenue outside automotive sales.
“The project is expected to generate substantial profit and recurring cash flows, helping offset ongoing EV business losses and strengthening VinFast's financial position and diversify source of debt repayment”
In-House Software Development
VinFast built level two driver assistance suite internally for VF 8 model to reduce software licensing costs.
“We used to license the technologies and now we develop these capabilities in-house at a fraction of the previous cost”
What it means
VinFast uses asset-light manufacturing in Vietnam to lower costs and fund software development for electric vehicles.
