Toyota earns 390 billion VND per month from selling cars to Vietnamese people
Toyota Vietnam has repeatedly sent out messages that it will withdraw its factory from Vietnam if there is no clear policy to develop this industry in the face of the wave of cheap ASEAN cars flooding in when the tax rate reaches 0% in 2018. In fact, for many years, this business has still had a dream profit level.
In 2015, Toyota sold about 52,428 cars, accounting for about 25.5% of the country's market share, a sharp increase compared to 40,749 cars in 2014. Although holding the Vietnamese car market share, this Japanese giant often does not disclose its business results in Vietnam.
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Many Toyota cars have become best-selling models in the market. |
According to a newly published document by Vietnam Engine and Agricultural Machinery Corporation (VEAM) - the unit holding 20% of capital in Toyota Vietnam, this joint venture always has high revenue and profit, growing strongly every year thanks to manufacturing, assembling and selling cars to Vietnamese people.
Specifically, the Japanese auto giant's revenue reached about 33,940 billion VND. In 2014, this car company also had revenue of 26,740 billion VND.
Toyota's profit is about 4,660 billion VND, a slight increase compared to 4,270 billion VND in 2014. Thus, each month Toyota can "pocket" at least 388 billion VND in profit thanks to manufacturing and assembling cars for Vietnamese people.
High revenue and profit levels help Toyota establish the second position, just behind Truong Hai. Many Toyota car models have become the best-selling cars on the market today, such as: Toyota Vios, Fortuner, Innova...
Toyota Vietnam Automobile Company was established in 1995, a joint venture with initial investment capital of 89.6 million USD from Toyota Corporation Japan (70%), VEAM (20%) and KUO Singapore Company Limited (10%).
Like many Japanese joint ventures doing business in Vietnam, Toyota makes a lot of profit so it always pays cash dividends every year. Although it only contributed 20% of the shares, in 2015, VEAM received 678 billion. Meanwhile, the parent company, Toyota Japan, brought in about 2,370 billion VND, and Singaporean shareholder Kuho also received 330 billion VND.
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Toyota Vietnam's revenue and profit from 2012-2015 |
Over 20 years of development in Vietnam, Toyota has made many contributions to the Vietnamese economy. To date, the car company has sold a total of 305,799 vehicles. From 11 employees on the first day of establishment, the number of employees of the company has now reached more than 1,900 people and more than 6,000 employees working at a system of 41 dealers - branches and authorized Toyota service stations across the country. Currently, Toyota's charter capital is about more than 49 million USD.
However, the Japanese giant has repeatedly sent out messages about moving factories out of Vietnam if there is no reasonable industry development policy.
Sharing at a press conference in mid-2015, Mr. Yoshihisa Maruta, General Director of Toyota Vietnam, said that the company is still hesitant about the decision to assemble, produce or import completely built-up cars when import tax from ASEAN countries is reduced to 0% in 2018. The reason given is that Vietnam still does not have a specific plan after the Overall Strategy for the Development of the Vietnamese Automobile Industry to 2020, with a vision to 2030, was approved while 2018 is not far away.
Mr. Le Thuy Trung, Deputy Director of the Department of Industrial Economics, Ministry of Planning and Investment, said that the rate of imported cars and spare parts in Vietnam is very high, pushing car prices in Vietnam 2-3 times higher than those in other countries. Domestic manufacturers have warned that they will withdraw and switch to commercial operations. But the most important thing is that assemblers still make big profits in Vietnam. Even though car prices are high, they are not foolish enough to withdraw from Vietnam. |
In early 2016, the company reiterated the need for State policies to strengthen and develop the supporting industry and the Vietnamese automobile industry to create favorable conditions for the market to continue growing.
In fact, despite making huge profits in Vietnam, Toyota's localization rate is still low.
In 1997, the market size was only 6,000 cars per year, Toyota held 22% of the market share, or about 1,200 cars, selling only 3 to 4 cars per day. Therefore, at that time, the General Director of Toyota Vietnam thought that localization was a luxury concept. Because, to localize, there must be a system of spare parts suppliers. But no spare parts company would invest a large amount of capital to invest in a production line just to supply Toyota with 3-4 components per day, the company would not be able to achieve business efficiency.
However, up to now, when car sales have increased 50 times, Toyota's localization rate has also gradually increased, but only at the level of 19 to 37% depending on each car line. According to the ASEAN valuation method. By 2015, the total number of Toyota's localized products for all car lines has reached over 270 products of all kinds.
Regarding the prospects of the Vietnamese automobile industry, VEAM stated that compared to other countries in the world, Vietnam joined the automobile manufacturing and assembly industry relatively late. Although there have been many policies to encourage development to make automobiles a key industry in the process of industrialization and modernization of the country, up to now, it can be said that the Vietnamese automobile industry is just a dwarf among giant manufacturers with outstanding reputation and a long history of the automobile industry.
According to VNE