Thaco Group, one of Vietnam’s leading private conglomerates, is considering bringing in an investor into its automobile arm Thaco Auto in a deal that could value the producer at around $5 billion, Reuters said Wednesday.
Thaco, founded by Vietnamese tycoon Tran Ba Duong, is in talks with a financial advisor to explore the potential sale of a minority stake in Thaco Auto after receiving interests from regional financial investors and corporates, the newswire service quoted two people familiar with the matter as saying.
The multi-business giant could be selling about 20% in Thaco Auto, one of the sources said. Deliberations were ongoing and no decisions have been made, the sources were quoted as saying, declining to be named as the matter is private.
Funds raised could be used to finance the group's properties projects, one of the sources said. According to Reuters, Thaco Group and Thaco Auto did not respond to its requests seeking comment.
Thaco Group was founded by Duong in 1997 in Dong Nai province bordering Ho Chi Minh City. It started as a used vehicles trader and repairer. Its current six business areas are automobile production and trading, mechanical engineering, agriculture, investment and construction, service and trading, and logistics.
Thaco Auto, whose production hub (named Thaco Chu Lai, which is also Thaco Group’s manufacturing hub) is in Nui Thanh district, the central province of Quang Nam, manufactures and distributes vehicles including passenger cars, trucks, buses, and motorcycles from brands ranging from Kia, Mazda, Peugeot, BMW, MINI, and Iveco to its own Thaco brand of buses. It has more than 400 showrooms and service centers across the country.
South Korean carmaker Kia started manufacturing in Vietnam in 2004 in collaboration with Vietnamese carmaker Thaco. The Thaco Kia manufacturing facility is inside Thaco Chu Lai.
The large-sized complex also makes Peugeot cars and motorcycles. BMW announced in December 2022 that Thaco will produce the BMW 3 Series, BMW 5 Series, BMW X3 and BMW X5 car models at Thaco Chu Lai.
“It has been nearly five years since we relaunched the BMW brand in Vietnam and brought Thaco on board as the official importer of BMW vehicles in the market,” Lars Nielsen, managing director, BMW Group Asia, said last December.
‘We have cultivated a strong relationship with the Thaco team during this time, and their experience and commitment to growing the brand is evident,” he said.
Kia and its sister carmaker Hyundai Motor are under the Hyundai Motor Group roof though they operate separately. The two brands are seeking to build on their leading positions in Vietnam, home to a population of 100 million. They unveiled their plans last week to solidify their lead in the rapidly growing Vietnamese market through the release of new models and sales of popular vehicles.
Kia plans to boost the sales of the Sonet, Carnival, Sportage and K3 in the Vietnamese market.