Škoda Auto Launches Local Assembly Plant in Vietnam, Marking Strategic Expansion

In a significant move to strengthen its presence in Southeast Asia, Škoda Auto has officially opened a new production facility in Vietnam's Quang Ninh province, signaling the automaker's ambitious international growth strategy.

The Czech automaker, part of the Volkswagen Group, began local assembly of the Kushaq SUV on March 26, 2025, with plans to start producing the Slavia sedan this summer. This expansion comes less than two years after Škoda's initial entry into the Vietnamese market in September 2023.

"Opening this new assembly line marks a milestone in our expansion into the rapidly growing Vietnamese market," said Klaus Zellmer, CEO of Škoda Auto. The company is leveraging geographical synergies by importing completely knocked-down (CKD) kits from its Indian production facilities, a strategic approach that reduces costs and accelerates market penetration.

The new plant showcases impressive manufacturing capabilities with a range of advanced technologies. It features contactless 3D measurement systems that enhance precision in manufacturing processes. The facility employs a sophisticated four-layer paint application technique to ensure superior finish quality. An advanced anti-corrosion wax treatment is applied to body cavities to protect vehicles from environmental damage. The site also includes a nearly two-kilometre-long test track designed to simulate diverse road conditions, allowing for comprehensive vehicle testing.

Andreas Dick, Škoda Auto Board Member for Production and Logistics, emphasized the facility's strategic location near the port of Haiphong, which ensures swift delivery of components from India.

Vietnam represents an exciting opportunity for automotive manufacturers. With only 34 passenger vehicles per 1,000 inhabitants in a country of 100 million people, the market shows tremendous growth potential. The nation is currently the fourth-largest automotive market in Southeast Asia.

Škoda plans to expand its sales network from the current 15 outlets to 32 dealerships by the end of 2025, including a new Experience Centre in Hanoi.

The locally assembled Kushaq and Slavia models are carefully designed to meet the specific requirements of Vietnamese consumers. These vehicles feature a left-hand drive configuration optimized for local driving conditions.

Advanced safety features include adaptive cruise control, which enhances driver comfort and security. The models also come equipped with blind spot monitoring technology to improve overall vehicle safety. Synthetic leather upholstery adds a touch of premium comfort to the interior, catering to local preferences and expectations.

This expansion is part of Škoda's "Next Level – Škoda Strategy 2030," which aims to be among the top five best-selling brands in Europe and effectively leverage growth markets in regions like India, North Africa, and Southeast Asia.

The partnership with local investor Thanh Cong Group underscores Škoda's commitment to collaborative, localized manufacturing approaches. Nguyen Anh Tuan, Chairman of Thanh Cong Group, highlighted the project's potential to foster European automotive collaboration and potentially expand into new energy and electric vehicle production.

As Škoda continues its international expansion, the Vietnam plant represents a crucial step in the company's global growth strategy, positioning it to capitalize on the rapidly developing Southeast Asian automotive market.