Skoda is taking on a strategic leadership role for the Volkswagen Brand Group volume in the ASEAN countries, with Vietnam playing a key role as a strategic gateway. Local production of the made-in-India Kushaq and Slavia from CKD format to begin in 2024.
23 Apr 2023 | 5676 Views | By Autocar Professional Bureau
Czech prime minister Petr Fiala today visited the future Skoda car production plant located in the Vietnamese province of Quang Ninh.
During the visit, the Prime Minister met with Martin Jahn, Skoda Auto Board member for Sales and Marketing, and representatives of the brand and its local partner, Thanh ...
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Czech prime minister Petr Fiala today visited the future Skoda car production plant located in the Vietnamese province of Quang Ninh.
During the visit, the Prime Minister met with Martin Jahn, Skoda Auto Board member for Sales and Marketing, and representatives of the brand and its local partner, Thanh Cong Motor Vietnam (TC Motor), as well as Vietnamese President Vo Văn Thưởng and the country’s Prime Minister Phạm Minh Chính. The purpose of the official visit was to show the Czech politician’s support for the carmaker’s business operations in Vietnam.
Škoda is taking on a strategic leadership role for the Volkswagen Brand Group Volume in the ASEAN countries, with Vietnam playing a key role as a strategic gateway. The aim is to maximise the Group’s growth potential in the region, which is economically highly attractive.
Skoda Auto’s Martin Jahn said: “The cooperation with a local partner in Vietnam marks a milestone in Skoda Auto’s internationalisation strategy: The market entry paves the way to accessing further markets in the ASEAN region. To be able to leverage the enormous sales potential as quickly as possible, we have already begun working intensively on the development of the sales network there: We are establishing the first partner dealerships, starting in Hanoi, followed by Da Nang and Ho Chi Minh City, and we’ll be importing the first vehicles from Europe as early as June.“
Vietnam as a gateway to the ASEAN region
The Czech carmaker is taking an important step in its internationalisation strategy with the construction of a TC Motor-invested and owned production plant in the Vietnamese province of Quảng Ninh.
Vietnam represents a strategic gateway for the company to the dynamic ASEAN markets and the larger Indo-Pacific region. ASEAN is currently the fastest-growing region in the world, with some countries’ strong economies growing by up to 8% annually. The projected volume of sales for 2030 is also high, at more than 4.5 million vehicles.
Skoda Auto’s entry into the Vietnamese market allows the company to benefit from synergies offered by the geographical proximity to India: Local production of the made-in-India Kushaq and Slavia model series from CKD (completely knocked-down) format will begin as early as 2024 at the new plant in Quảng Ninh province.
Sales activities in the market are set to commence in just a few months: Local partner TC Motor will start selling the first European models this summer, with initial dealerships planned in the metropolitan areas of Hanoi and Ho Chi Minh City, as well as one of Vietnam’s biggest cities, Da Nang. The medium- to long-term aim is to expand the Škoda Auto dealer network to more than 50 partners, especially since the sales potential looks promising: The brand foresees annual sales of 30,000 units in the medium term, with that figure rising to over 40,000 units after 2030.
Starting in 2023, the Czech car manufacturer plans to gradually import the Karoq and Kodiaq model series from Europe, followed by the Octavia and Superb in 2024. In addition, the allelectric Enyaq iV will expand the local model range in the future. All of these vehicles will arrive fully built-up from Europe.
Skoda's Group responsibility to increase in ASEAN
Skoda Auto already has Group responsibility in India as part of the India 2.0 project. This responsibility is set to increase significantly with the company’s entry into the Vietnamese market. The Czech carmaker has been tasked with strategically leading the Volkswagen Brand Group volume in the ASEAN region and developing a regional strategy for these important growth markets.
The aim is to establish Skoda as a strong brand at the local level and ensure profitable long-term growth in the volume segment. Given the Czech carmaker’s responsibility for the global development of the current MQB A0 platform, Vietnam and the ASEAN region represent an important customer base for Skoda products utilising this platform.
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