Czech’s Skoda Auto revs up first sales in Vietnam

Skoda Auto officially launched the sale of its vehicles in Vietnam on Monday, the Czech automaker said.

The move is an important step for Skoda Auto as part of its internationalization strategy in cooperation with TC Group, a Vietnamese automobile producer and assembler, which was initiated in October 2022.

Skoda plans to rapidly expand its dealer network to 20 partners by 2025 and 30 by 2028, towards annual sales of 40,000 units from 2030. The automaker regards Vietnam as a gateway to enter the promising ASEAN region, it said in a release.

Skoda’s first models in Vietnam, namely the Karoq and Kodiaq, both sport utility vehicles (SUVs), will be imported from Europe. Skoda targets local production of complete knock-down (CKD) automobiles from 2024 in a bid to utilize Vietnam’s proximity to India, another production hub.

Starting in the second half of 2024, Skoda will be transporting the first Kushaq vehicles from the Pune facility in India to Vietnam for assembly from CKD kits, with the Slavia model set to follow in 2025.

Construction of a production line at the $500-million Viet Hung Industrial Park in Vietnam’s northern province of Quang Ninh by TC Group is already underway. Based on market trends, the automaker holds ambitions to ramp up production, potentially assembling 27,000 vehicles annually after 2027.

The 36.5-hectare factory, Skoda’s first in Southeast Asia, is set to churn out its first vehicles by the end of 2024, and then eco-friendly electric vehicles in 2026.

Skoda also highlighted the high potential of the Vietnamese market. At present, Vietnam is the fourth strongest automotive market in Southeast Asia, with only 38 vehicles per 1,000 inhabitants in a population of roughly 100 million people, amid anticipated strong economic growth.

Members of the Vietnam Automobile Manufacturers' Association (VAMA), not including VinFast and Hyundai, sold 184,554 vehicles in Jan-Aug this year, down 30% year-on-year.

Hyundai reported sales of 35,191 units in January-August, according to a report by TC Group, the manufacturer and official retailer of Hyundai vehicles in Vietnam. Its August sales figure was 3,145 units.

As a result, Hyundai was the best-selling brand in Vietnam in the first eight months of this year. Other top names were Toyota with 34,372; Ford with 23,366; Mitsubishi with 18,783; and Honda with 12,516.