Neta is apparently going to have to cut up to 400 jobs in Thailand, why is this?
Electric vehicle (EV) manufacturer Hozon Auto is reportedly planning to lay off 400 employees in Thailand as part of a restructuring effort aimed at realigning its operations and improving financial performance. The decision follows a period of disappointing sales for its subsidiary, Neta Auto (Thailand), which has faced significant challenges in the competitive Thai EV market.
In the first 11 months of 2023, Neta Auto (Thailand) reported a 45.8 percent year-on-year drop in sales. The company managed to deliver only 6,534 units of its Neta V, Neta VII, and Neta X models, a stark decline compared to previous years. The sales slump highlights the increasing pressure faced by EV manufacturers in the region, particularly as the market becomes more saturated with both established and new competitors.
Moreover, according to data from business intelligence platform Creden Data, Neta Auto (Thailand) has incurred significant financial losses in 2023. The company posted a net loss of 1.8 billion baht for the year, a sharp contrast to the 80.77 million baht profit it made the previous year.
Over the past five years since its inception in 2019, Neta Auto (Thailand) has accumulated a total revenue of 7.78 billion baht (roughly RM1,016,272,650), but has also suffered cumulative losses amounting to 1.72 billion baht. This financial instability has prompted the company to initiate restructuring measures, including the planned job cuts.
Neta Auto (Thailand) also operates its manufacturing facility at the Bangchan General Assembly factory, where it produces EVs under the Neta brand. The factory has been central to the company’s operations in Thailand, which has been a key market for its EV offerings.
On top of that, despite efforts to position itself in a growing market, the company’s financial results suggest that it has struggled to gain a strong foothold against more established competitors in the region. The restructuring and job cuts are part of a broader trend in the Thai automotive sector, where both local and international players are facing challenges in adapting to the rapidly evolving EV market.
The transition to EVs has introduced new dynamics, with factors such as competition, consumer demand, and regulatory changes all playing significant roles in shaping the future of EV manufacturing in the region. As Hozon Auto looks to restructure its operations, it will be focusing on improving efficiency and reducing costs to ensure its long-term viability in a competitive marketplace.
The company’s ability to recover from its current financial difficulties will depend on how effectively it can navigate these challenges and re-establish its position in the rapidly expanding EV market.
