Skoda continues to drive the company's internationalization and is about to join the Vietnamese market. From 2023, the Czech vehicle manufacturer will provide the first European models in collaboration with Thanh Cong Motor Vietnam (TC Motor), a local partner. The assembly of CKD kits (Completely Knocked Down) of the models Skoda Kushaq and Skoda Slavia will also begin in 2024. The production line is now being built. With its constantly rising economy and significant potential in the automotive business, the country provides excellent conditions for Skoda Auto to further strengthen its presence in the region. The firm initially anticipates 30,000 automobiles sold each year.
"For Skoda Auto, entering the Vietnamese market is a logical next step in our internationalization strategy," says Klaus Zellmer, CEO of Skoda Auto. With our appealing model selection, we offer precisely the correct products for customers and will be able to play to our strengths in this very dynamic market. Furthermore, the geographical proximity to India creates significant synergies: as early as 2024, we will be exporting vehicle kits from our Indian plant in Pune to Vietnam, fiercely moving our INDIA 2.0 project forward. Overall, we plan to considerably expand our presence in Southeast Asia."
"Internationalization of our business is a vital aspect of our NEXT LEVEL - Skoda STRATEGY 2030," says Martin Jahn, Skoda Auto Board Member for Sales and Marketing. We see significant growth potential in Vietnam, and the Czech EU Council Presidency and the EVFTA free trade agreement are attractively priced economic and political requirements. We have also discovered a strong and dependable partner in TC Motor to help us quickly establish a presence in Vietnam. We are certain that our model portfolio will meet the needs of the Vietnamese and look forward to getting started early next year."
The Skoda Kodiaq, Skoda Karoq, Skoda Superb, and Skoda Octavia model series will be gradually imported from Europe in 2023. As Skoda Auto's local partner in the Vietnamese market, TC Motor takes over vehicle manufacture and sales. With over 20 years of expertise in vehicle manufacture and contract sales in Hanoi, the group also engages in acquiring and developing industrial regions such as the Viet Hung Industrial Park. Skoda models will be manufactured at the location in the province of Quang Ninh in the future.
Skoda Kushaq and Skoda Slavia's manufacture begin in 2024, with the Skoda ENYAQ iV series becoming available after 2025.
A TC Motor production line is already under construction and is expected to be completed in the first half of 2024. India will begin CKD production of the Skoda Kushaq and Skoda Slavia model series in 2024. Orders for the Skoda Kushaq can already be placed in the first half of 2024, and orders for the Skoda Slavia will be accepted beginning in the fourth quarter of 2024. In Pune, a 16,000-square-meter plant for the fabrication of the matching assemblies is now under construction. After 2025, the Skoda ENYAQ iV electric SUV will be available in inventory.
Vehicle exports from India are the next step in the INDIA 2.0 program. Skoda Auto is moving ahead with the realization of the INDIA 2.0 project by exporting vehicles from India, emphasizing India's strategic relevance for the automobile manufacturer's development. The first left-hand drive Skoda KUSHAQ has lately begun to be exported to the Gulf States. Since 2019, Skoda Auto has been responsible for the Volkswagen Group's business in India. The group has invested one billion euros, with 250 million euros going into research and development. Skoda and the Volkswagen brand aim for a 5% market share, in the long run, depending on market and category development.
The automobiles are sold through a network of local dealers and partners. The first partner companies will be established in Hanoi and Ho Chi Minh City, which account for most new automobile sales in Vietnam. Skoda Auto expects the dealer network to expand swiftly to more than 50 partners. Skoda Auto predicts annual sales of 30,000 to 40,000 units per year by 2030, due partly to interest in volume models based on the MQB-A0-Global platform and rising demand for electric vehicles in the country's major cities.
Incentives for commitment include a rapidly rising economy, a dynamic automotive market, and free trade agreements.
A commitment in Vietnam is also worthwhile due to the automotive market, which is growing particularly rapidly in a regional comparison. Despite having a population of around 100 million people and only 34 automobiles per 1,000 inhabitants, the country is already Southeast Asia's fourth-largest automotive market. At the same time, when tariffs on EU goods are gradually phased out by 2030, European brands are projected to acquire relevance in Vietnam. Skoda Auto anticipates that the entire market volume will rise to roughly one million vehicles annually by 2030.