Czech carmaker Skoda eyes Southeast Asia expansion via Vietnam plant

Vietnam is serving as a strategic gateway for Skoda Auto to the dynamic ASEAN markets and the larger Indo-Pacific region, the Czech carmaker said.

Skoda Auto is building a production plant in Quang Ninh province, northern Vietnam, in partnership with Vietnamese automaker Thanh Cong Motor. The new plant will assemble Skoda models Kushaq and Slavia as of 2024, with parts provided by Skoda's production plant in India, Skoda announced Sunday.

“Skoda Auto’s entry into the Vietnamese market allows the company to benefit from synergies offered by the geographical proximity to India,” the European carmaker said.

Skoda said it plans to import some of its European models for sale on the Vietnamese market later this year.

Skoda’s website is now also accessible to Vietnamese customers, tailored to their needs and the local market. The website, in Vietnamese, provides information on upcoming releases, products, and planned customer events.

Czech Prime Minister Petr Fiala visited the site of the new plant on the weekend during his Vietnam working trip, showing his support for the carmaker’s business operations in Vietnam.

“I visited the building site of the new Skoda Auto factory and its local partner TC Motor. I appreciate that Skoda is expanding into Southeast Asia and entering this promising market, which is the gateway to the whole of ASEAN. The production of cars should start next year and should reach 30,000 cars,” Fiala tweeted.

Skoda said after its Kodiaq and Karoq models being available in the Vietnamese market later this year, its Superb and Octavia vehicles will join them next year, while the fully-electric Enyaq iV will also debut at a later date. Each of these models will arrive fully assembled from Europe.

“The cooperation with a local partner in Vietnam marks a milestone in Skoda Auto’s internationalization strategy: the market entry paves the way to accessing further markets in the ASEAN region,” Martin Jahn, the company’s auto board member for sales and marketing, said in its Sunday release.

“To be able to leverage the enormous sales potential as quickly as possible, we have already begun working intensively on the development of the sales network there.

“We are establishing the first partner dealerships, starting in Hanoi, followed by Danang and Ho Chi Minh City, and we’ll be importing the first vehicles from Europe as early as June,” he said.

A total of 30 dealerships would open over the next few years, and Skoda aims to sell 30,000 units per year in Vietnam in the medium term, then up to 40,000 vehicles per year after 2030, the firm said. Its new production facility in northern Vietnam plans to employ 700 people in this initial phase.

Skoda has been tasked with strategically leading the Volkswagen Brand group volume in the ASEAN region and developing a regional strategy for these important growth markets. The aim is to establish Skoda as a strong brand at the local level and ensure profitable long-term growth in the volume segment.