Vietnam offers numerous advantages for Skoda Auto's investment: executive

Vietnam offers a range of advantages for investment by Czech automaker Skoda Auto, including its seaport system, logistics infrastructure, and skilled labor, the company’s chairman and CEO Klaus Zellmer said on Thursday.

In a meeting with Prime Minister Pham Minh Chinh in Hanoi, Zellmer stated that Skoda Auto is the largest automobile manufacturer in the Czech Republic.

Privatized in 1991, the company became part of Germany’s Volkswagen Group and is now present in over 100 countries, with annual sales surpassing 1 million vehicles.

Skoda holds a key position in Volkswagen’s electric vehicle (EV) development and digitalization strategies, with significant footprints in European and Indian markets.

In 2022, Skoda and Vietnam’s Thanh Cong Group (TC Group) signed an MoU on cooperation in producing and distributing Skoda-branded vehicles. In September 2023, Skoda’s fully imported vehicles were officially launched in Vietnam.

The TC Viet Hung automotive plant in Quang Ninh province is a key project within the Viet Hung automobile and industrial park support industry complex, developed by TC Group.

Construction started in early 2023, and the plant was officially inaugurated on Wednesday, with production and assembly lines designed to manufacture Skoda vehicles.

During the meeting, Prime Minister Chinh congratulated the inauguration of the TC Viet Hung automotive plant and highlighted that Skoda’s choice of Quang Ninh as the location was highly appropriate.

He urged Skoda Auto to strengthen and expand long-term investment and business cooperation with Vietnamese enterprises in the automotive manufacturing sector, develop the ecosystem of Vietnam’s automotive industry, and broaden production and business into areas where Skoda has strengths and Vietnam has demand. He also encouraged Skoda to attract other investors to Vietnam.

“Skoda should explore opportunities for Vietnamese companies to engage more deeply in the production and supply chains of Skoda and Volkswagen, particularly in Southeast Asia. Additionally, it should continue to research model changes and develop car lines that align with trends and appeal to the tastes of the Vietnamese market and Southeast Asia as a whole,” the PM said.

The government leader also suggested that Skoda enhance localization, diversify its products, and explore the possibility of producing engines, components, and equipment for other car manufacturers in Vietnam, as well as in other sectors like aviation and railways, to meet domestic demand and expand to markets beyond Vietnam.

Increasing the localization rate would help Skoda reduce costs and enhance its competitiveness in Vietnam, he added.