Vietnamese luxury car dealer Haxaco’s business slumps, stock nears two-year low

The operations of Hang Xanh Automobile Service JSC or Haxaco (HoSE: HAX), known as the largest distributor of Mercedes-Benz vehicles in Vietnam, are under pressure as consumers tighten spending and competition among car brands intensifies.

Haxaco recorded a 25% drop in revenue to VND1,150 billion ($43.66 million) in Q3, according to its consolidated Q3 financial statements.

Gross profit margin contracted sharply from 11.3% to 5.1%, while gross profit plunged 65.7% to VND60 billion ($2.28 million). Interest expenses and selling and administrative costs all increased.

Haxaco posted a post-tax loss of VND25.8 billion ($979,400) in Q3, a sharp decline from a profit of VND90 billion ($3.42 million) in the same period last year.

This result dragged the company’s nine-month profit down to just VND1 billion ($37,960), a 99% drop year-on-year. Of note, profit attributable to the parent company shareholder was negative at VND27.4 billion ($1.04 million).

As of the end of 2024, the company operated five Mercedes-Benz outlets, including three in the southern region and two in the north.

In recent years, Haxaco has also expanded into distributing MG cars (a more affordable segment).

The company currently owns 14 dealerships across major cities such as Ho Chi Minh City, Hanoi, Can Tho, Bac Giang, Danang, and Nghe An. It targets increasing its total number of dealerships to 18 by 2025, including 12 “3S Premium” dealerships.

Haxaco’s declining business performance comes as the luxury car segment faces headwinds from reduced consumer spending and heightened competition from other premium brands - particularly as rivals intensify promotional and financial support programs.

According to the company, the automotive market experienced significant fluctuations in Q3, with a wave of deep price discounts not only in the luxury segment but also across the mass-market category.

Competitors continuously launched new models with strong promotional offers to boost competitiveness and attract customers. Meanwhile, operating expenses rose due to business expansion.

Amid the challenging business outlook, Haxaco’s stock price has dropped from VND17,600 per share at the end of August to VND11,050 ($0.42) on Wednesday, down more than 34% and hovering near its two-year low of around VND10,700 per share.