Vietnam holds potential to become Czech carmaker Skoda's manufacturing hub in ASEAN: exec

Vietnam boasts great potential to become an auto export and manufacturing hub of the Czech Republic’s Skoda Auto in ASEAN and other markets, said its chairman Klaus Zellmer.

Zellmer made the statement in a talk with Prime Minister Pham Minh Chinh in Praha on Sunday during the Vietnamese leader's official visit to the Czech Republic.

Vietnam is an important gateway for the firm to access the ASEAN market, he added.

According to Zellmer, in 2022, Skoda Auto, the largest carmaker in Czech, and Vietnam’s Thanh Cong Group (TC Group) signed a cooperation agreement to produce and distribute vehicles under the Skoda brand with the goals of raising localization rate and utilizing modern technology and clean energy. In September 2023, fully imported Skoda models were officially launched in the Vietnamese market.

The two companies are implementing a project to build a manufacturing and assembly plant at the Viet Hung Industrial Park in Ha Long town, the northern province of Quang Ninh.

The $500 million plant is expected to be completed in Q1/2025, becoming the first Skoda car manufacturing plant in Southeast Asia. The first two CKD (completely knocked-down) models, Kushaq and Slavia, are scheduled to be introduced this year.

Highlighting TC Group as a reliable partner, Zellmer sought the Vietnamese government's support to ensure the project's success and the promotion of EVs in Vietnam. This would create opportunities for stakeholders to expand the electric charging infrastructure and facilitate Skoda's introduction of EVs to the Vietnamese market.

PM Chinh lauded Skoda's decision to partner with TC Group as a right choice. He suggested Skoda continue working closely with the Vietnamese Ministry of Industry and Trade and other relevant agencies to discuss its CKD vehicle assembly project in Vietnam and future development plans, and keep exploring opportunities to expand in the country.

Skoda needs to enhance research and development of EVs, raise the localization rate, and transfer technology to the Vietnamese side, he noted.

The PM encouraged Skoda to invest on a large scale, focusing on high-tech products, technology transfer and localization. This approach would help Vietnamese firms integrate more deeply into Skoda's global production and supply chains, fostering the development of the Vietnamese automotive industry, he said.

“The Vietnamese government pledges to create favorable conditions to ensure that Skoda and other Czech investors can invest and do business effectively and sustainably, in line with Vietnam's legal regulations, the PM added.

Prime Minister Chinh is visiting the Czech Republic from January 18-20 at the invitation of his Czech counterpart Petr Fiala. Following the visit, he will attend the 55th Annual Meeting of the World Economic Forum (WEF) in Davos, and engage in bilateral meetings in Switzerland from January 20-23.