[Public Notice+] LVMC Holdings Reports Q1 Sales of 109.5 Billion KRW, Up 58.1% Year-on-Year

[Asia Economy Reporter Hyunseok Yoo] LVMC Holdings posted results showing simultaneous growth in sales and profits as its overseas businesses, not only in Laos but also in Myanmar and Cambodia, performed well despite the COVID-19 pandemic.

On the 28th, LVMC Holdings reported Q1 consolidated sales of 109.5 billion KRW (USD 91.64 million) and operating profit of 2.4 billion KRW (USD 1.98 million), representing a 58.1% increase in sales and a 150.5% increase in operating profit compared to Q1 of the previous year. Additionally, gross profit reached 13 billion KRW, doubling compared to the same period last year.

LVMC Holdings declared its 5.5.5 strategy in 2015, aiming to break away from concentrating sales in Laos, a country with a population of 7 million, and achieve over 50% of sales from overseas businesses in neighboring countries within five years. During this period, it established automobile factories in Vietnam, Cambodia, and Myanmar, and changed its company name from Korao Holdings to LVMC Holdings, resulting in balanced growth across countries.

The Q1 results of LVMC Holdings reflect these effects, with overseas sales reaching 42.1 billion KRW, accounting for 38.7% of total sales. In particular, the Myanmar market showed remarkable growth, with sales increasing by 373% year-on-year in Q1, selling 952 units, coinciding with the establishment of Hyundai Motor's assembly plant last year.

In Myanmar, Hyundai Motor steadily increased its market share from the second half of last year, engaging in a close ranking battle with Japan's Toyota. Based on automobile registration office statistics for Q1, Hyundai Motor was narrowly in third place, but as of March, it sold 391 units, achieving a 16.1% market share compared to Toyota's 12.3%, widening the gap and securing second place.

Currently, the top position in the Myanmar market is held by Japan's Suzuki, which established a production plant five years ago and mainly sells low-priced older models. However, Suzuki's market share continues to decline due to LVMC Holdings' aggressive marketing. From this year, LVMC Holdings plans to expand local dealers further, and with the launch of the Accent PE, the successor model to the Creta, and the H-1 (Starex) model in the second half of the year, sales are expected to accelerate.

LVMC Holdings' main business area, the Indochina Peninsula, borders China, raising concerns about the COVID-19 situation. However, early implementation of various policies such as social distancing, entry and exit restrictions, and bans on gatherings in public places, as part of the government's proactive response, successfully contained the virus. As of today, confirmed COVID-19 cases are 19 in Laos (population 7 million), 327 in Vietnam (population 98 million), 124 in Cambodia (population 17 million), and 206 in Myanmar (population 55 million).

An LVMC Holdings official stated, "We identified consumer tendencies following the spread of untact (contactless) culture and strengthened online channels based on our existing nationwide offline distribution network, enhancing contactless sales by delivering vehicles directly to customers' homes anywhere nationwide upon order." He added, "After-sales service also benefited from differentiation by providing online diagnostics and sending technicians directly to customers without visiting repair shops, resulting in additional gains compared to competitors."

Furthermore, to overcome national disasters together, the company donated quarantine supplies such as masks and thermal scanners, provided its training center for quarantine measures by disaster prevention authorities, and strengthened social distancing promotional activities with the government, demonstrating corporate social responsibility alongside the public and earning greater trust and support from the government and citizens.

A company representative said, "Although crises and challenges await in preparing for the post-COVID era, as protection of domestic industries strengthens and restrictions on gatherings and movement continue, LVMC Holdings, the only global automobile company competing within the Indochina Peninsula with production plants in each country and both online and offline distribution and delivery systems, actually has an opportunity."

The official added, "Moreover, amid global uncertainty caused by the COVID-19 pandemic, sufficient funds were secured through a paid-in capital increase for the first time in 11 years since listing. We will solidify market share by enhancing capital soundness, liquidity management, on-time production system establishment, SCM management for stable parts supply, strategic inventory and sales incentive operations, and long-term installment financing services to improve customer convenience."

He explained, "We will also continue core investments for the future, such as expanding online trading platform construction, activating contactless sales channels, and total solution logistics business, thereby solidifying our position as a leading company in the Indochina Peninsula and continuing growth."