Czech’s top automaker Skoda to complete Vietnam factory this quarter

Czech’s biggest automaker Skoda is set to complete its $500 million factory in northern Vietnam, its first in Southeast Asia, by the end of March.

The company plans to launch two locally assembled models this year after the completion of the plant, which it develops with Thanh Cong – a local distributor of Hyundai cars, according to the Vietnam Government Portal.

The plant, located in the northern province of Quang Ninh, has a capacity of 120,000 vehicles a year.

Its chairman Klaus Zellmer told Prime Minister Pham Minh Chinh Sunday that the Vietnam factory is an important milestone in the company’s expansion strategy in Southeast Asia.

The PM requested the company to accelerate its research and development of electric vehicles in the country and increase its localization rates as part of a technology transfer effort.

He said that the Vietnamese government would offer incentives to investors who meet requirements related to technology transfer, increasing scientific and technological content, and helping Vietnamese businesses participate deeper the supply chain.

Skoda chairman Klaus Zellmer affirmed the company’s commitment to long-term investment in Vietnam.

He promised to pump up the current localization rate of 40%.

He considers Vietnam a strategic gateway to access the rest of the Southeast Asian market. The country has potential to become a production and export hub for Skoda vehicles to other countries.

He expressed hope that the Vietnamese government would continue to support and provide favorable policies for businesses.

Skoda said earlier that it saw the region’s potential when it started exporting completely-built units to Vietnam in 2023.

“We realized Skoda has a future in Vietnam and Asia,” chief marketing officer Vu Manh Cuong said previously in an interview.

He added: “It takes time to show [cars] to the customer, for people to try the product, feel it out.”