A New Manufacturing Hub in Vietnam

Škoda Auto is making significant strides in Southeast Asia, establishing a robust manufacturing presence in Vietnam. A newly inaugurated 36.5-hectare plant is now operational, featuring state-of-the-art facilities including a welding shop, paint shop, assembly line, and a two-kilometer test track. This facility marks a pivotal moment in Škoda’s strategy to tap into the burgeoning ASEAN market.

Kushaq and Slavia: Tailored for the Vietnamese Market

Production has commenced with the assembly of the Kushaq SUV, with the Slavia sedan slated to follow. Thes models, specifically adapted for Vietnamese consumers, boast left-hand drive configurations and enhanced features. These enhancements include advanced safety and comfort technologies such as cruise radar, blind-spot monitoring, and synthetic leather upholstery. These modifications reflect Škoda’s commitment to meeting the unique demands and preferences of the local market.

ASEAN Expansion: A Strategic Pivot

Vietnam serves as Škoda’s strategic gateway to the ASEAN region, a dynamic economic zone encompassing countries like Malaysia, Indonesia, and Thailand. this move is part of a broader strategy to diversify its global footprint, offsetting sales fluctuations in other markets. The company aims to achieve annual sales of 30,000 to 40,000 vehicles in the region by the end of the decade.

This strategic shift comes at a time when the ASEAN automotive market is experiencing considerable growth. According to recent industry reports, the region’s automotive sector is projected to expand by over 5% annually in the coming years, driven by increasing disposable incomes and urbanization.

Leveraging Partnerships for Growth

Škoda is employing a unique partnership model in Vietnam, collaborating with the TC Group, one of the country’s largest private companies.The TC Group not only handles the assembly of Škoda vehicles but also manages the brand’s sales network,which is set to expand from 15 to 32 showrooms this year.This collaboration represents a substantial investment of approximately $500 million (CZK 11.5 billion) by the TC Group.

Martin Jahn, a member of the Board of Directors for Sales, emphasized the novelty of this arrangement, highlighting that Škoda is essentially acting as a supplier to a local manufacturer. This approach allows Škoda to leverage its existing product development expertise without incurring significant capital expenditure on production facilities.

It is indeed a long-term partnership, a partnership for more than three years.
Martin Jahn, Škoda Board of Directors

Targeting the Volume Market

Škoda’s ambition in Vietnam is not to position itself as a premium brand but rather to capture a significant share of the volume market by offering high-quality vehicles. The locally produced Kushaq and Slavia models will form the core of this strategy, complemented by imported SUVs like the karoq and Kodiaq, as well as the Octavia RS and Superb. The company’s sales target for the Vietnamese market is 4,000 cars this year, with a goal to double that figure in the following year.

We do not want to be a premium brand in Vietnam, but we are targeting the volume market where we want to bring our quality.
Martin Jahn, Škoda Board of Directors

Historical Ties and Economic Growth

Vietnam’s robust economic growth and historical ties with the Czech Republic, dating back to when many Vietnamese citizens studied and worked in Czechoslovakia, make it an ideal entry point for Škoda. The presence of a strong Vietnamese community in the Czech Republic further strengthens this connection.

The decision to enter the next country has not yet fallen.
Klaus Zellmer, chairman of the Board of Directors

Škoda’s Global Presence

Škoda Auto operates extensively with production plants in the Czech Republic, China, Slovakia, and India, primarily through partnerships, and also in Ukraine with a local collaborator. Employing around 40,000 individuals globally, Škoda reaches nearly 100 markets worldwide.

In 2024, Škoda delivered 926,000 vehicles to customers, marking a 7% year-on-year increase. The current lineup includes 12 model lines: Fabia, Scala, Octavia, Superb, Kamiq, Karoq, Kodiaq, Elroq, Enyaq, Slavia, Kylaq, and Kushaq.