Ford dealer reports 36-fold profit increase
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City Auto Corp, Vietnam’s largest Ford dealer, reported profits of VND51.8 billion (US$2.27 million) last year, a 36-fold rise from 2020.
But it sold only 4,580 vehicles, 29 percent fewer than in 2020, and the increased profitability was due to the average price of each rising by 13 percent to VND915 million.
The company attributed the decline in number of cars sold to last year’s Covid-19 outbreak and social distancing, but said business bounced back in the last quarter of 2021 thanks to post-pandemic economic recovery and the registration fee cut.
It hopes to sell 8,820 units this year and double profits to VND104 billion, its highest ever.
Opening new Ford dealerships and also distributing other car brands are part of its strategies to achieve the goals, it said.
It did not exclude the possibility of acquiring other dealerships and selling electric vehicles.
Questions & Answers
Q.What caused City Auto Corp's significant profit increase despite selling fewer vehicles?
What caused City Auto Corp's significant profit increase despite selling fewer vehicles?
The substantial profit increase was primarily due to the average price of each vehicle rising by 13 percent, reaching VND915 million. This price increase outweighed the decline in sales volume.
Q.What factors led to the decline in the number of cars sold by City Auto Corp?
What factors led to the decline in the number of cars sold by City Auto Corp?
The company attributed the reduction in vehicles sold to the Covid-19 outbreak and social distancing measures implemented last year. Business did improve in the final quarter of 2021.
Q.What strategies does City Auto Corp plan to use to achieve its sales and profit targets for the current year?
What strategies does City Auto Corp plan to use to achieve its sales and profit targets for the current year?
To reach its goals of selling 8,820 units and doubling profits, City Auto Corp plans to open new Ford dealerships and begin distributing other car brands. Acquiring other dealerships is also a possibility.
Q.When did City Auto Corp's business start to recover after the challenges of the previous year?
When did City Auto Corp's business start to recover after the challenges of the previous year?
Business for City Auto Corp bounced back during the last quarter of 2021. This recovery was attributed to the post-pandemic economic recovery and a cut in registration fees.
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