Truong Hai of Vietnam explores potential stake sale in $5 billion automotive division
According to two individuals familiar with the matter, Truong Hai Group, a prominent Vietnamese conglomerate established by tycoon Tran Ba Duong, is contemplating the possibility of bringing in an investor for its automobile subsidiary, Thaco Auto. This potential deal could value the unit at approximately $5 billion. The sources reveal that Truong Hai Group is currently in discussions with a financial advisor to explore the option of selling a minority stake in Thaco Auto, following expressions of interest from regional financial investors and corporates.
One of the sources suggests that the group may sell around 20% of Thaco Auto. It is important to note that these discussions are ongoing and no final decisions have been made. The funds raised from this potential sale could be utilized to finance Truong Hai Group’s property projects. Thaco Auto, as stated on its website, is involved in the manufacturing and distribution of various vehicles, including passenger cars, motorcycles, and buses under brands such as KIA, BMW, and its own Thaco brand. The company operates over 400 showrooms and service centers across the country, along with seven factories.
Truong Hai Group is also engaged in the development of residential and commercial properties, including the Sala City urban project in Ho Chi Minh City, spanning over 1 million square meters. Both Truong Hai Group and Thaco Auto have not responded to requests for comment. This potential deal arises at a time when the Vietnamese government is striving to increase localization rates in the automotive sector and attract investments for the development of electric vehicles, with the aim of establishing Vietnam as a regional hub for automobile production and exports.
Despite foreign carmakers like Toyota and Honda dominating the Vietnamese automotive sector, local brands such as VinFast and Thaco Auto are gaining prominence, partially due to government support. Truong Hai Group, originally known as Truong Hai Auto Corp, was founded in 1997 in Dong Nai province near Ho Chi Minh City. It initially operated as a trader and repairer of used vehicles before expanding into a conglomerate with six businesses, including automobiles, agricultural production, construction, and logistics, as detailed on its website.