NATIONAL ECONOMICS UNIVERSITY

CENTRE FOR ADVANCED EDUCATIONAL PROGRAMS

INTERSHIP REPORT
FINANCE

CHEVROLET NEWWAY

VU THI MINH HAI

HANOI, 2017
NATIONAL ECONOMICS UNIVERSITY

CENTRE FOR ADVANCED EDUCATIONAL PROGRAMS


INTERSHIP REPORT
CHEVROLET NEWWAY

Student:
Major:
Class:
Student’s ID:
Supervisor:

HÀ NỘI – 2017

Vu Thi Minh Hai
Finance
Finance 56C

11141172
Pro. Dr. Bui Huy Nhuong.


TABLE OF CONTENT

i


ACKNOWLEDGEMENT
The first internship is of the utmost importance, which lays a solid
foundation in the career path for us students in the final years. We stand the chance
to apply the theoretical knowledge gained at university in practical and have the
opportunity to approach the business operation in the reality. Through the process of
experiencing hands-on tasks, we also learn about the workplace environment and
essential soft skills, which is prerequisite to the graduated internship.
Firstly, I would like to express my deepest thanks toward Pro. Dr. Bui Huy
Nhuong in National Economics University for his devoted guidance and supervision,
which have been extremely valuable for my study and help me a lot in
accomplishing this internship report.
During the internship time in Chevrolet Newway company, I am so grateful
to be provided with an opportunity to be a part of the organization and I would like
to send my special thanks to Ms. Ta Thi Minh Phuong - the CEO and all the other
employees of the company in allowing me to carry out this internship project and
giving necessary advices.
With all your willing help, I have completed the report successfully and
experienced a meaningful internship.

ii



STATUTORY DECLARATION
I pledge that this internship report is my own research and is guided by Prof. Dr Bui
Huy Nhuong. The research contents, results in this topic are true and not published
in any form before. The figures in the tables for analysis, comment, and evaluation
are collected by myself from various sources, which are indicated in the reference
section.
In addition, the internship report also uses some comments, reviews as well as data
of other authors, other organizations which have cited and annotated the source.
If there are any fraud detected, I will take full responsibility for the content.
National Economics University is not involved in copyright infringement in the
course of implementation.

iii


ABBREVIATION

iv


LISTS OF FIGURES AND TABLES
Figure 1: Expense of Chevrolet Newway from 2014 to 2016.............................11
Figure 2: ROA and ROE of Chevrolet Newway from 2014 to 2016...................13
Figure 3: Numbers of car sold in 2016 of three largest dealers in Hanoi..........14
Table 1: Income Statement of Chevrolet Newway from 2014 to 2016.................9

v



INTRODUCTION
Rationales
In such a fast-paced and modern world, the requirements of transport have
increasingly more demanding. People are in need of a vehicle, which not only helps
them to move fast and enjoy the convenience but also reflect their characteristics. It
is the reason we have been witnessed fierce competition between various companies
which manufacture and sell cars. To stand firmly in such a competitive market like
that, one business confronts a lot of challenges and obstacles. It requires each
company to constantly innovate, improve professional services and promote
marketing campaigns to attract customers and then boost sales.
Despite many difficulties and the fact that Chevrolet Newway has just
stepped into Chevrolet dealer market of GMV, the company has made considerable
progress and proved potential growth in the future. It always invests in building and
maintaining the value of trust and satisfaction of customers with the best products
and services possible. This internship report summaries my knowledge and
experience during time in Chevrolet Newway.
Research objectives
The research general objective’s is to comprehend the operation system of a
typical business. In this case of Chevrolet Newway, the specific objectives are:
• Studying the organizational structure of a business and functions of each
department
• Evaluating the business effectiveness through financial analysis
• Proposed recommendations to enhance the efficiency of the business
Research scopes
This internship report focuses on Chevrolet car market in Hanoi area. Big
players include Giai Phong Chevrolet, Thang Long Chevrolet and Chevrolet
Newway. Statistics and data are collected in the three-year period, from 2014 to
2016.
Research methods
The main research method in this report is to gather data and analyze the

information.
Due to the deficiencies in the process of studying, the limitations in
observing, searching, analyzing and judging the performance of the company is
unavoidable. I am looking forward to receiving feedbacks to perfect the internship
report.
1


CHAPTER 1: OVERVIEW OF CHEVROLET NEWWAY
1.1 History of the company
Chevrolet Newway is the 3S-standard agent of GMV (General Motor
Vietnam). Located in the center of Hanoi, the company is designed modernly with a
full range of Chevrolet products, accessory showcases, repaired and guaranteed
services that meet all the highest standards of Vietnam Register. Chevrolet Newway
currently has two branches:
The company’s headquarter lies on 183 Yen Lang Street (intersection with
378 Lang street), Thinh Quang ward, Dong Da district, Hanoi. It is built on an area
of over 2000 m2 with: a full display of current vehicles, a separate service area, a
variety of accessory exhibits and a repair shop with a modern system of machinery
and equipment.
The second establishment is based in Lai Xa Industrial Park, Kim Chung,
Hoai Duc, Hanoi with an area of over 4,000 m2, divided into separate repair
compartments, which ensures the best standards in all dealers of GMV and fully
meet all technical requirements and repair quality of customers when using the
service.
These below are the significant milestones in the development road of
Chevrolet Newway:
21/07/2010: The company is originally founded namely Autonewway. At the
early stage of development, the brand Autonewway had been known mainly through
the supply of the totally new imported cars such as Toyota, Honda, Nissan …

11/08/2011: Autonewway had been granted Certificate of maintenance and
warranty cars number 019 / VAQ10-01/11 of Vietnam Register. The current
machines meet all the standards of automobile warranty and maintenance of
imported cars according to Circular No. 43/2011 / TT-BGTV.
22/01/2014: In order to serve the customers better, the company decided to
invest in building a new facility – Hoai Duc Autonewway with a large scale of 4000
m2 and full modern equipment.
At the same time, in pursuit of providing a perfect car service to customers,
Autonewway had officially launched its used car business, specializing in TOYOTA
vehicles (both domestically assembled vehicles and imported cars).
28/08/2014: To maximize the utility of the customers in providing services
for luxury cars, Autonewway officially deployed the Lexus Service Center, which
2


was equipped with specialized diagnostic equipment and instruments, a team of
high quality technicians and all genuine oil as well as engines.
08/10/2015: Autonewway had officially become Authorized Dealer of
General Motors Vietnam, with a new name: Chevrolet Newway, a distribution of
Chevrolet car products and services – a global brand name originating from the
United States.
2015-present: Chevrolet Newway continues to grow and develop to serve the
most satisfied services to the customers and has reached many impressive
achievements.
1.2 Organizational structure

Figure 1: Organizational Structure of Chevrolet Newway
1.3 Functions of departments
To enhance the sense of responsibility of each department in the company to
operate effectively and ensure high productivity, the tasks of each department are

allocated as follows:
Chief Executive Officer: The CEO has full responsibility for planning,
monitoring and integrating the strategic direction of the company. This includes
controlling and managing the whole activities of the company for all components
and departments. Besides making important decisions related to production and
business activities, the CEO influences the whole organization in building the
culture, mission, vision, code of conduct or leadership style that all these values are
applied consistently from the top to the bottom, making people feel safe and
respected, enabling them to perform at their best. CEO plays a key role in whether
and how well the business will prone to succeed.

3


Director of service workshop: The director has to warrant that the customers
are received the best services in each step related to car purchase, maintaining and
repairing.
Car Accessories: The department is responsible for technical managing
compartment, assuring that all the machinery equipment and car accessories
purchased or imported for sale are updated and meet high quality standards and. It is
required to fix and reform components based on the distribution and orientation of
the company.
Production Plant: The function of this department is assembling, installing
and distributing cars to the customers.
Business Executive: The business development executive will combine sales
and marketing department in order to create growth and help company attract more
customers. The responsibilities include planning marketing campaigns, maintaining
existing customer relationship, immersing in new market, finding potential
customers…
Finance and Accounting department: The main purpose of this department is

to summarize and report financial activities of the business in the balance sheet,
profit and loss statement and cash flow statement, take responsible for the
management of accounting under the regulation of the company and ensure the
compliance with laws and legislations. It also directs and supervises the process of
implementing finance at both headquarter and the second branch office. As for the
accounting, it is subdivided into two basic categories– managerial accounting and
financial accounting. The former one is in charge of dealing with information which
is used by owners and managers of the company to help them manage the operation
more efficiently and make decision such as salary expenses for the staff, cost of
goods sold or anticipated profit. The latter one, on the other hand, engages in
dealing with information that is released to the public, such as creditors, suppliers,
customers…
Human Resource department: Since people are the main ingredient of every
organization, this department is formed to concern with the management of
employees from recruitment to retirement. The two main functions are motivating
employees to perform the best in their ability and maintain their commitment
towards the company. From the process of recruitment, training and orientation
courses, ensuring healthy working environment, managing employee relations…,
HR department has to take the full responsibility.
4


1.4 Mission and codes of conduct
−

The company’s vision:
Becoming and sustaining the Chevrolet No.1 Dealer in Vietnam.

−


The best used car dealer in Hanoi, through quality products with warranty

and professional after-sale services.
−
A trusted brand name for service, repair and maintenance of high quality cars
with the most dedicated and professional service attitude.
Mission: Building and maintaining the value of trust and satisfaction of
customers with the best products and services in Vietnam
Core Value:
−
To the customers: Mission to serve with quality and prestige
−

To the individual staff: Respect, discipline, effort and dedication

−

To the cooperation: Solidarity and sharing for development

−

Business motto
Quality products and services are the top priority.

−

Customer is first and always right.

−


Corporate culture creates a sustainable Chevrolet Newway home.

−

Constantly increasing the benefits and credibility of customers, employees,

shareholders and partners.
1.5 Industry and strategy analysis
In each competitive market, there are many different factors determining the
power of a business. Using Porter’s five forces framework (Kotler, 2008) will help
us a lot to evaluate the competitive strength and current position of Chevrolet
Newway
Supplier power: Because Chevrolet Newway is an authorized dealer of
General Motor Vietnam, its supply is quite stable and the company do not have to
suffer from the fluctuation in cost or have chance to switch to another supplier.
However, the targets from GMV each month put the company into constant
pressure. It serves both as an incentive and also strain for the whole organization.
Buyer power: Nowadays, the demand for buying cars of people has increased
a lot. Furthermore, there are variety of choices for them in all kinds of cars and it
costs nothing for a customer to switch from one seller to another. So, it is really a
challenge for the business and it is almost a must-to-do thing that provides close-toperfect service that could influence on not only their decision to purchase the cars
but also their recommendation with their friends and relatives. Because there are a
5


lot of suppliers and if one business cannot serve the customers well, they will be not
hesitant to find better services in other businesses. It is utmost important to sustain
the relationship with existing customers rather than finding new potential clients.
Threat of substitution: As for substitution, there are a number of ways that
other suppliers can imitate Chevrolet Newway’s products and lines of service that

can weaken the company’s position and threaten the profitability. There are also
different brands that can substitute for Chevrolet cars and their promotion programs
are so attractive like:
−
Hyundai:
+

Promotion in factory for vehicles: Accent & Creta

+

Hyndai successfully increased the discount for two car models: Elantra: 4%

(Last month 3%) / Santafe: 5% (Last month 3%) /
+
Additional discounts for customers in the line: Elantra, Santafe, Tuscon,
Starex, (even i10 stretch too much reduction)
− Suzuki: Promotion in factory at Ciaz: 10 million
− Honda: CRV is in the discharge line between the car and the head of the
motorcycle. The discount price is about 150-200tr over the newly adjusted listing
price.
− Toyota: Toyota is currently donating registration tax to Innova and Vios
customers
Competitive rivalry: Rivalry is extremely high among existing firms in this
industry. The two other main competitors of Chevrolet Newway in Hanoi include
Chevrolet Thang Long and Chevrolet Giai Phong.
−
Chevrolet Thang Long: The company was founded in 2012, 4 years earlier
than Chevrolet Newway and it is always on top of the list of the most profitable and
efficient dealer of General Motor Vietnam in Hanoi. It has affirmed its position in

the heart of Chevrolet’s professional dealer of Chevrolet Vietnam. Chevrolet Thang
Long has achieved four consecutive years as the leading dealer in sales and service
quality of Chevrolet in Vietnam. In addition, for three consecutive years, Chevrolet
Thang Long was also honored with the GM International Grandmasters program,
the most prestigious award for GM dealers in the region leading sales, services,
index Customer satisfaction as well as standard facilities. Currently, the company
has two showrooms located 2 prime location gateway capital, always ready to serve
customers with warranty service, maintenance and repair services, genuine
Chevrolet auto parts.
6


−

Chevrolet Giai Phong: The company is established nearly at the same time

with Chevrolet Newway, in 11/08/2015. It is also a standard dealer of global
Chevrolet with modern equipment and is built on an area of 3200m2 located in
Hoang Mai district, Hanoi. Its lines of product is diversified and services include:
repair, maintenance, accessories, insurance and rescue in emergency situation.
Always coming behind Chevrolet Thang Long in ranking the best dealers of GMV
in Hanoi, Chevrolet Giai Phong is a redoubtable opponent of Newway.
In 2016, compared with the two other large dealer of GMV in Hanoi to sell
Chevrolet vehicles, Chevrolet Newway’s numbers of car sold in 2016 are still quite
slow, only 492 relative to 663 and 813 of Chevrolet Giai Phong and Chevrolet
Thang Long respectively.
Threat of new entry: GMV is planning to expand Vietnamese market and it
may pose a threat to the current position of Chevrolet Newway when there are a
numerous dealers of GMV growing.
On the evening of April 26, 1977, General Motors Vietnam (GM Vietnam)

and GM Thang Long Joint Stock Company officially opened Chevrolet Thang Long
Dai Viet dealership, the 22nd dealer of Chevrolet nationwide. Chevrolet Thang
Long Dai Viet is located in the center of Long Bien District at No. 1, Nguyen Van
Linh. Owning a favorable position in the North East of Hanoi such as Hung Yen,
Hai Duong, Hai Phong, Quang Ninh, Chevrolet Thang Long Dai Viet create
favorable conditions for customers in the area. With a total investment of up to US $
2 million, Dai Viet Chevrolet Thang Long meets the rigorous standards of GM
global human resources, facilities and equipment. Exhibition space of 450m2 and
2500m2 for repair workshop area, Dai Viet Chevrolet Thang Long operates with the
function of a 3S dealer including: Sales, warranty, maintenance, repair and delivery
of genuine Chevrolet auto parts.

7


CHAPTER 2: COMPANY’S BUSINESS PERFORMANCE
2.1 Service offferings
Chevrolet Newway company divides into many different departments, each of
which is in charge of particular aspect that brings about the revenue in operation
business. Here are diversified ranges of product and service that Chevrolet Newway
offers:
Used Cars: Chevrolet Newway provides used vehicle products which are all
famous brand names like Lexus, Mercedes, Mitsubishi, Toyota, Audi, Ford,
Chevrolet, Nissan,…All used cars sold by the company are rigorously tested and
committed to five main categories:
− The car has never had an accident.
− The car has never been submerged
− Vehicles have never overhauled in engines and gearboxes.
− Vehicles has specify origin and year of manufacture.
− All the related papers are valid and eligible to buy, sell, and transfer the

ownership.
Within 7 days from the date the customer receives the car, the customer can check
the car at any places, and if the error as mentioned above exists, the company will
get back the car and refund 100% of the money.
New Cars – Chevrolet Cars: As for the new cars sold, because the company is the
authorized dealer of Chevrolet, its main products are new Chevrolet cars which are
diversified in sizes, colors, designs… and here are some outstanding products:
−
Chevrolet Trailblazer: An American vehicle which is known as big in size
and it is powered by large engines. The Trailblazer comes standard with inferior
room, offering a comfortable-experiencing ride with cutting edge technological
features.
−
Chevrolet Colorado: Vietnam is considered as a potential market for
growing, GM Vietnam has shown its determination to dominate the pickup market
by launching the Chevrolet Colorado 2017. The engine has been significantly
improved and a number of inferior features have also beautifully designed and
innovated, including the ability to start the vehicle from a distance with exclusive
Mylink technology.
−
Chevrolet Cruze: This has been rated by the world's most prestigious brands:
the five-star Safety Car and the top 10 best-selling cars in the world. The new Cruze
features a new daylight headlamp integrated with new headlights, classy black
8


interiors, state-of-the-art facilities, Mylink global technology and four airbags and
retractable cameras.
Motor-car Accessories: The company also provide high quality accessories
which help make the car more luxurious, comfortable and durable such as: Car

steering wheel cover, car seat, exterior protection, replacement mirror glass, car
security….
Car Insurance Advisory: The customers will be offered a package of car
insurance solution that Chevrolet Newway has selected from partners which are the
most prestigious insurance companies in Vietnam. Currently, Chevrolet Newway is
a leading agent of insurance companies including: Liberty Auto Insurance, Bao Viet
Automobile Insurance, PTI Automobile Insurance, PVI, BIC, MIC... The insurance
department will advise the customer from the accident notification for insurance,
the compensation assistance until the car is repaired. Some related car insurance
includes: Compulsory civil liability insurance, secondary driver's and passenger car
accident insurance and vehicle damage insurance
Car Repair and Maintenance: The three main services related are:
− Free delivery service at the place where requested.
− 24/7 service, in case the vehicle is experiencing technical problems.
− Assistance/Advice and troubleshooting when using the car on the road within
Hanoi.
2.2 Financial analysis of Chevrolet Newway
Table 1: Income Statement of Chevrolet Newway from 2014 to 2016
1. Gross sales
2. Deductions
3. Net sales
4. Cost of goods sold
5. Gross profit
6. Financial income
7. Financial expenses
- in which: Interest expense
8. Selling expenses
9. G&A expenses
10. Net operating profit
11. Other income

12. Other expenses
13. Other profit (loss)
14. Profit before tax
15. Current CIT
16. Deferred CIT

VNDmn
32,213.22
(30.18)
32,183.04
(28,758.02)
3,425.02
2.92
(3.76)
(3.76)
(469.89)
(2,463.99)
490.30
50.07
(217.65)
(167.58)
322.72
-

9

VNDmn
79,310.81

VNDmn

318,601.14

79,310.81
(74,372.13)
4,938.68
2.10
(411.27)
(411.27)
(1,389.97)
(3,456.35)
(316.81)
1.67
(4.37)
(2.70)
(319.51)
-

318,601.14
(302,653.00)
15,948.14
7.59
(2,347.40)
(2,347.40)
(9,884.41)
(5,235.44)
(1,511.52)
3,175.49
(832.54)
2,342.95
831.43

(85.25)
-


17. Profit after tax

VNDmn
322.72

VNDmn
(319.51)

VNDmn
746.18

2.2.1 Revenue
As we can see from the table, the revenue of the company has increased
significantly in the period of 3 years consecutively from 2014 to 2016. The revenue
of the company in 2015 increased 146% in compared with the revenue in 2014 and
especially, the revenue in 2016 increased 302% in compared with the one in 2015
and 890% with this one in 2014. The event of becoming the Authorized Dealer of
General Motors Vietnam and expansion the scale of operation by distributing
Chevrolet car products and services clearly left a huge impact in the revenue
indicator of the company.
About the indicator of how efficient the company is in using labor and
supplies, its gross profit gradually climbed from 3,425.02 million to 4,938.68
million in 2014 and 2015, and especially increased sharply in 2016, 15,948.14
million. This upward trend undoubtedly was the result of the significant rise in the
revenue.
The profit after tax of Chevrolet Newway in 2015 experienced the negative

value (-319.51 million) and considerably decreased in compared with this indicator
in 2014. This could be explained that around a half year end of 2015, the company
suffered high cost associated with selling new car products and providing new types
of service but this expansion did not bring about much profit immediately.
2.2.2 Expenses
The presented diagram illustrates the comparative data between the proportion
of Cost of goods sold/ Net revenue and G&A expense/ Net revenue over the years
from 2014 to 2016. The proportion of COGS/ Net revenue moved upward
constantly, from 89.4% in 2014 to 93.8% in 2015 and 95% in 2016. The fact that the
direct costs attributable to the goods sold is high is easy to understand because the
company is an authorized dealer of Chevrolet.
A positive sign we can see from the bar chart is that the general administrative
expense of the company has went down gradually, starting from 7.7% in 2014 to
4.4% in 2015 and then 1.64% in 2016. Although G&A expense always occurs even
when there is the absence of sales, this indicator of Chevrolet Newway was not a
huge amount compared to the net revenue and it even decreased over the years. This
proves that the company were doing quite well in dealing with expenditure

10


associated with daily business’s operation and could minimize G&A expense as
much as possible.

Figure 1: Expense of Chevrolet Newway from 2014 to 2016
From the analysis about revenue and expense, we can grasp the idea about
the profitability results and overall performance of Chevrolet Newway. However, to
have deeper understanding about the company’s financial position, we need to study
some fundamentally financial ratio as shown in the table below:


Liquidity
ratios
Profitability
ratios (%)

Activities
ratios
Solvency
ratios

Current ratio
Cash ratio
Net profit margin
Gross profit margin
Operating profit margin
Returns on assets (ROA)
Returns on equity (ROE)
Inventory turnover
Days of inventory on hand
Receivables turnover
Days of sales outstanding
Debt to equity ratio

11

2014
3.26
1.24
1.00
10.64

1.50
2.28
2.87
8.2
44.5
11.4
32

2015
1.28
0.19
-0.40
6.23
-0.40
-0.80
-2.93
14.4
25.3
25.7
14

2016
1.16
0.19
0.20%
5.00
-0.50
1.24
6.40


0.26

2.64

4.15


2.2.3 Liquidity ratios
Liquidity ratios are used by analysts to determine the firm’s ability to pay its
short term liabilities. The given figures help us in identifying and assessing the short
term financial situation of the company as follow. As for the current ratio, this index
decreased noticeably in the first period, from 3.26 in 2014 to 1.28 in 2015, and went
down slightly in the second period, from 1.28 in 2015 to 1.16 in 2016. Although in
each year, the company could meet all its current liability obligation if necessary
and its profit climbed year by year, it seemed that the company less current assets to
cover current liabilities. Cash ratio is a more stringent index of liquidity because it
only includes cash but not inventories or other assets that may not be liquid. As for
in 2015 and 2016, these indexes of the company were both lower than 1, this means
if it only counted cash, the company could not pay off its current obligations.
2.2.4 Profitability ratios
These indexes measure the performance of a business relative to revenues,
assets, equity and capital. Taking the measurements, we can asset Chevrolet
Newway’s ability to generate earnings in compared with expenditures and relevant
costs incurred in the period from 2014 to 2016.
Net profit margin is the ratio of net income to the revenue and it shows how
much money is generated in earnings for every dollars in sales. It also reveals
whether the revenues can be cover over all the expenses and there is money left to
have profit and reinvest. The profit margin of Chevrolet Newway witnessed a
fluctuated trend over the three years. From 2014 to 2015, due to a drop in profit, this
index reduced from 1% to -0.4%. In the following year, the ratio had been improved

a lot thanks to good performance to uplift the sales and revenue. Although the profit
earned compared to revenue was not too high, it was still considered a positive
point with the potential growth anticipation.
The gross profit margin takes the measurements of the profitability generated
when we subtract the direct cost of those sales associated with. In the case of
Chevrolet Newway, this index plunged year by year and this could be explained that
the company had to pay a lot of money in acquiring Chevrolet products to put them
in the ready-to-buy state.
Operating profit margin measures the ratio of operating profit to sales while
we eliminate all operating expense like: selling expense, general and administrative,
expenses…Although the revenue went up, the expense also went up which led to
12


the decrease in the net operating income and then the downward tendency in
operating profit margin, from 1.5% in 2014 to -0.4% in 2015 and -0.5% in 2016.
ROA measures how efficient the company is in using its assets to generate
profit. In 2015, Chevrolet Newway experienced the negative ROA (-0.8%) due to
the fact that it had loss. However, in the next year – 2016, the company had quickly
recover and gain the profit. The ROA ratio uplifts to 1.24%.
From the line graph below, it is obvious that ROE was so fluctuated in the
three year period from 2014 to 2016. It went into free-fall from 2014 to 2015 but
due to huge profit in 2016, this index experienced a jump from 2015 to 2016 (2.93% to 6.4%).

Figure 2: ROA and ROE of Chevrolet Newway from 2014 to 2016
2.2.5 Activities ratios
Because the company depends much on buying to resell, it is very important
to take measurements of how efficient it can control its merchandise. In 2015,
number 8.2 means that the company only sold roughly 10% of its inventory during
a year. However, this indicator had been improved, reached 14.4 in 2016.

About the days of inventory on hand, it was quite high in 2015 which mean
that too much capital was tied with inventory and these inventory might suffer from
being obsolete and this indicator was also improved in 2016.
2.2.6 Solvency/ Structure ratios
Debt-to-equity ratio expresses the reliance of the business as a source of
financing on debt and equity. It is the relationship between the capital created by
creditors and shareholders and answers the question that whether shareholder’s
13


equity can fulfill the obligation of the company with the creditors in the event of
liquidation. The supplied table indicates that in 2014, with every dollar of Chevrolet
Newway owned by the shareholders, the company owed $0.26 to the creditors and
it was totally capable of paying debt to them in case of liquidation. However, this
index moved upward over the years and in 2016, it reached 4.15, which means the
financial resources of the company depended on creditors fourth times as much as
on the shareholders and the company could not generate enough cash to perform its
obligations.
2.3 Assessment on company’s performance
Achievements
Overall, Chevrolet Newway has gained tremendous achievements in recent
years, the period from 2014 to 2016. Firstly, the revenue surged each year and the
growth rate was very high as it was 146.2% and 301.7% in 2015 and 2016
respectively. Secondly, the profit after tax of the company in 2016 was also twice as
much as this one in 2014. Lastly, despite the fact that the company has just entered
the competitive market of being authorized dealer of GMV for 2 years, it has shown
many positive signs and held many advantages towards promising future to become
dominant in the Chevrolet car market in Vietnam.
Limitations
Despite huge achievements, there have been many things that Chevrolet

could keep working to improve.

Figure 3: Numbers of car sold in 2016 of three largest dealers in Hanoi
14


Firstly, we can see in the column below that in compared with the two other
large dealer of GMV in Hanoi to sell Chevrolet vehicles, Chevrolet Newway’s
numbers of car sold in 2016 are still quite slow, only 492 relative to 663 and 813 of
Chevrolet Giai Phong and Chevrolet Thang Long respectively.
Secondly, the company has not used the source of fund effectively. What we
can see from the financial analysis above is the issues related to financial resources
of the company. It is the debt to equity ratio that is too high, which means that a
large amount of asset could be claimed by the firm’s creditors. Some sequential
consequences might be: It reduces the value of the owners as their proportions in
asset are low, increases the difficulty in asking for additional funds for new projects
as banks often require low debt to equity ratio. And moreover, this high index also
increases the insolvency risk that if the company is liquidated, it could not pay off
all its obligations.
Lastly, we know that managing inventory levels is vital for most businesses,
and it is especially important for retail companies or those selling physical goods,
however, Chevrolet Newway’s management of inventory on hand is not really
effective. The days of inventory on hand was quite high, which proves that too
much capital was tied with inventory and these inventory might suffer from being
obsolete. Moreover, car also carries special features of commodity, and because of
fast-paced change, it is becoming easier to be old-fashioned, and it is not really
good to keep inventory in warehouse for a long time.
The causes which leads to low sale include:
Marketing strategy: Chevrolet Newway has just stepped into the world of
selling Chevrolet vehicles and in Hanoi, there have been many Chevrolet dealers

which established many years ago and these dealers maintain a certain amount of
their loyal customers. Therefore, if Chevrolet Newway wants to jump the sale, it
needs to promote many unique marketing campaigns in order to raise the awareness
of the customers about the company’s brand name.
Payment due: When considering the days of sales outstanding mentioned
above in 2016, we can see that indicator was quite low. 14 days is the period of time
the company needs to collect the cash from the customers. Although this proves that
it manage the cash flow quite well and could avoid many issues related to bad debt,
the rigorous credit policy of the firm might be hurt sales. Because we all know that
Chevrolet cars are luxurious goods, very expensive and not everyone can afford to
buy one. Additionally, if the payment due required is too short for them to manage,
the customers can swift to others dealers to look for longer payment due.
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CHAPTER 3: COMPANY DEVELOPMENT ORIENTATION AND
RECOMMENDATIONS
3.1 Company development orientation
The company has proposed strategic plan to follow in the next coming years with
the view to:
−
Becoming and sustaining the Chevrolet No.1 Dealer in Vietnam.
−

The best used car dealer in Hanoi, through quality products with warranty

and professional after-sale services.
−
A trusted brand name for service, repair and maintenance of high quality cars
with the most dedicated and professional service attitude.

With the vision like that, in the next 3 years, the company has determined to carry
out some main specific plan:
−
Setting a goal to reach the growth rate of revenue 350% in the next year.
−

Reducing the overhead expenses 20% to minimize the cost incurred.

−

Expanding the scope of market beyond Hanoi to three neighboring provinces

Hai Phong, Hai Duong, Quang Ninh.
−
Focusing on bringing services which is close to perfect to make competitive
advantage compared to other rivals
−
Sustaining existing customer relationships by providing thoughtful after-sale
services.
3.2 Recommendations
Promoting marketing campaigns: Because the Chevrolet Newway brand
name is quite new, it takes time for people to identify and let it go into their mind.
But Chevrolet Newway can speed up this process by these two ways below:
−
Choosing representative for the brand name: Many famous people
have made huge impact and influence on people, not only the way they admire their
idols but also the way they imitate the idols’ behavior and lifestyle. Choosing
famous stars as the representative of Chevrolet new car lines can draw a lot of
attraction from people. Many people regard the car as not only a mean of
transportation but also a mean to show their characteristics and lifestyle. Hence,

proper selection of representative can definitely boost the sales and raise customers’
awareness of Chevrolet Newway as soon as possible.

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−

Holding test-driving new car programs: Chevrolet car test-driving is

considered one of the most important steps in the decision to bring a car home.
Before buying a car you should test-driving first to make sure it is of best quality.
But the company should not wait until the customers have intention to buy the cars
that let them have a stab but hold free test-driving car programs in many different
local places. At the first place, many people do not seem to plan to buy a car, but
after experiencing the feeling of driving a luxurious Chevrolet car and have better
understanding about the products, they can change their mind.
Loosening the credit policy: As mentioned above, the company’s tight credit
policy to collect money from customers might result in driving away potential
clients and give business to the rivals. In this case Chevrolet Newway should extend
the payment due to attract more customers. Another way is to bring about possible
payment solutions by providing many instalment programs with quick and easy
procedure. Because the expenditure is too high, pay by instalments today is very
popular and accounts for a large percentage of car purchases and many company
applies this payment method to help customers relieve the burden of lacking money.
However, many clients seems to be hesitant to involve due to the complicated
procedures. Therefore, Chevrolet should cooperate with banks or financial
companies like JACCS to provide fast and simple services, allowing them to have
their own dream cars without worrying about the cost.
Decreasing the debt-to-equity ratio: Because this index is an important

solvency ratio and the creditors always keep a watch on this, it is utmost essential
for the company to monitor this ratio regularly and make adjustments if necessary.
These are possible methods that are worth considering:
−
New/Additional stock issue: This process will help the company to
increase the cash flow from the shareholders, executive obligations to reduce the
debt burdened. Rising equity and reducing debt can lead to low debt-to-equity and
the reliance of the business on creditors.
−
Equity/Debt swap: By executing a swap between debt and equity, the
company can turn a creditor into a shareholder and then improve this radio.
−
Leasing assets: The cash flow from selling assets and then leasing
back can be used to pay off existing debts and reduce the debt-to-equity ratio.

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CONCLUSION
We all recognize that the potential of Vietnam’s automobile market is
growing and all the standards are demanding. In modern society, there have been
strict requirements on quality, comfort, safety and warranty service. More and more
automobile companies have been born to meet the strict requirements that serve
customers, and each company, if it wants to exist and develop sustainably, has to
follow a strategic plan consistently and also makes adjustments whenever necessary
in order to catch up with the times and satisfy customers.
From all the analysis of business operation, we can see that achievements
gained at the early stage when emerging in competitive market will definitely lay a
solid foundation for the Chevrolet Newway to reach further success in the near
future. With clear view of purpose and the determination of the whole company, all

the objectives will be completed as plan and expectation.
We also see that it is utmost important to have deep understanding about the
overall financial performance of a company. It gives us the direction where the
company should go, which strategy it should follow and which adjustments it
should make to meet the goals and objectives. To measure the financial performance
of a company, there are different tools and methods to carry out the analysis. One of
the most common use is to analyze basic financial ratios. These indicators are used
to make comparisons among different aspects. Balance sheet provides a portrait of
the stability and health of the business while the income statement show the level of
gaining profit and satisfying the shareholders of that company. However, besides
analyzing fundamental ratios, we should consider other factors such as the big
rivals’ performance and the trend of the whole industry and market.
In conclusion, studying about a company’s financial statements is very
essential, not only for the managers to help them supervise and improve the overall
performance but also provide various precious information that investors and
creditors use to evaluate and make the investment decision.

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