Vietnam could emerge as Skoda’s ASEAN manufacturing center, says executive.

Vietnam is positioning itself as a pivotal player in the automotive industry, particularly for Skoda Auto, the Czech Republic’s largest carmaker. Klaus Zellmer, the chairman of Skoda Auto, recently highlighted this potential during a discussion with Vietnamese Prime Minister Pham Minh Chinh in Prague. This meeting marked an important step in cementing Vietnam’s role as an automotive export and manufacturing hub in the ASEAN region and beyond.

The chairman’s remarks underscored Vietnam’s strategic importance for Skoda, suggesting that the country serves as a vital gateway to the ASEAN market. This aligns with Skoda’s vision to leverage Vietnam’s robust manufacturing capabilities and growing consumer base to enhance its market presence in Southeast Asia.

This collaboration isn’t new; in 2022, Skoda partnered with Vietnam’s Thanh Cong Group (TC Group) to produce and distribute vehicles under the Skoda brand. The agreement aims to increase localization rates and incorporate advanced technology along with clean energy solutions into Vietnam’s automotive landscape. Fast forward to September 2023, and Skoda officially launched fully imported models in Vietnam, marking a significant step in their strategic rollout.

A crucial element of this partnership is the upcoming $500 million manufacturing and assembly plant set to be established at the Viet Hung Industrial Park in Ha Long, Quang Ninh province. This facility is anticipated to be the first Skoda manufacturing plant in Southeast Asia and is scheduled for completion in the first quarter of 2025. The plant will initially focus on two completely knocked-down (CKD) models, Kushaq and Slavia, slated for release this year.

Zellmer praised TC Group as a reliable partner, expressing a desire for the Vietnamese government to provide support in ensuring the project’s success, particularly in promoting electric vehicles (EVs) in the country. He articulated a vision where expanding the electric charging infrastructure would play a critical role in facilitating the introduction of Skoda’s EV range in Vietnam.

On the other side, Prime Minister Chinh responded positively to Skoda’s collaboration with TC Group, deeming it a wise decision. He encouraged Skoda to work closely with Vietnam’s Ministry of Industry and Trade to discuss their CKD vehicle assembly project and future plans. Moreover, he highlighted the importance of enhancing research and development in EV technology and increasing localization rates, which would benefit the Vietnamese automotive sector.

Additionally, the Prime Minister stressed the need for technology transfer from Skoda to local firms to deepen their integration into the company’s global supply chains. He emphasized that Skoda should consider large-scale investments, particularly focusing on high-tech products. Through this collaboration, Vietnam aims to bolster its automotive industry, making it more competitive on a global scale.

The Vietnamese government has committed to providing favorable conditions for Skoda and other Czech investors, aiming for a sustainable business environment that aligns with Vietnam’s legal regulations. This initiative underscores Vietnam’s intent to create a thriving automotive ecosystem that is not only competitive but also technologically advanced.

Prime Minister Chinh’s visit to the Czech Republic from January 18-20 was not only focused on automotive discussions but also included participation in the 55th Annual Meeting of the World Economic Forum (WEF) in Davos and bilateral meetings in Switzerland. This trip illustrates Vietnam’s ambition to strengthen its international ties and position in the global market.