VinFast Sells Rp122 Trillion Factory, Governance at Vingroup Questioned

VinFast Auto, the Vietnamese electric-vehicle manufacturer, has again come under the spotlight after announcing plans to sell its two main factories in a multi-billion-dollar deal. The move raises questions about corporate governance within the Vingroup conglomerate, owned by Vietnamese billionaire Pham Nhat Vuong.

Over the past decade VinFast has been known for aggressive expansion and heavy spending to build a global EV business. Yet the company has not posted a profit since its founding in 2017.

The prospective buyers will also assume around $6.9 billion of debt, roughly Rp122 trillion. Upon completion of the transaction, VinFast says it will adopt an asset-light business model, focusing more on research and product development rather than owning large production facilities.

Vingroup says the move would leave VinFast almost debt-free, as manufacturing liabilities would no longer appear on the company’s balance sheet. Production costs have long been a major contributor to VinFast’s large losses.

Last year alone, the company posted a loss of about $3.9 billion, equivalent to around Rp68.9 trillion.

Attention has focused on the involvement of several parties who still have close ties to Vingroup and Pham Nhat Vuong. Singapore-based automotive analyst Mehdi Jaouadi of YCP Singapore says the strategy could strengthen VinFast’s financial position, but he notes governance-related risks.

From a strategic and financial perspective, the move makes sense and provides a solid foundation for VinFast to grow, Jaouadi said. But from a governance perspective, the decision carries several red flags and raises questions, he added.