The Czech automaker last week announced to enter Vietnam with an impressive plan by partnering with a local partner.
Hanoi (SVBG) – Škoda Auto and Vietnamese partner Thanh Cong Motor (TC Motor) have recently signed in Hanoi a strategic agreement that lays out the European carmaker’s ambitious market expansion, aiming to introduce to Vietnamese customers its home-made models followed with made-in-India models in 2023 and 2024 respectively.
The Volkswagen-owned carmaker is also building in Vietnam a facility to assembly the CKD (Completely Knocked Down) kits for the India-made models, to be operational in 2024.
“For Škoda Auto, entering the Vietnamese market is the next logical step in our internationalization strategy. Our attractive model portfolio offers exactly the right products for our customers, and we will be able to play to our strengths in this highly dynamic market. In addition, the geographical proximity to India provides great synergy effects; as early as 2024, we will be exporting vehicle kits from our Indian plant in Pune to Vietnam, marking a major advancement of our INDIA 2.0 project. Ultimately, this will significantly strengthen our presence in Southeast Asia,” said Škoda Auto CEO Klaus Zellmer.
“We see considerable growth potential in Vietnam. The Czech presidency of the EU Council and the Europe-Vietnam free trade agreement create very favorable economic policy conditions”, added he.
Škoda Auto anticipates an initial sales volume of 30,000 vehicles per year, which will be carried out by the Vietnamese partner TC Motor, who will also be responsible for local production, a public statement by Škoda Auto indicated.
“Despite having a population of around 100 million people and currently only around 34 vehicles per 1,000 inhabitants, the country is already the fourth strongest automotive market in Southeast Asia. At the same time, European brands are likely to become increasingly prominent in Vietnam due to the gradual elimination of customs duties on goods from the EU by 2030. For this reason, Škoda Auto expects the total annual market volume to increase to around one million vehicles beyond 2030,” the Czech automaker estimated. SVBG