HÀ NỘI — Czech automobile manufacturer Skoda is set to complete a US$500 million factory in Quảng Ninh Province this quarter. 

The facility will initially produce internal combustion engine vehicles before transitioning to electric vehicles, with plans to export to Southeast Asian markets.

Skoda has partnered with Thành Công, a distributor for Hyundai, one of the most popular car brands in Việt Nam. 

Currently under construction, the factory is located about an hour from a major VinFast electric vehicle production hub.

As the first automotive factory in the province, it will span 36 hectares with an annual production capacity of 120,000 vehicles. 

Skoda, which began exporting cars to Việt Nam in 2023, sees significant potential in the market.

“We recognise that Skoda has growth opportunities in Việt Nam and Asia,” Marketing Director of Skoda Việt Nam Vũ Mạnh Cường said. 

However, he added that it will take time to introduce products to customers, allowing them to experience and familiarise themselves with the brand.

The factory, Skoda’s first in Southeast Asia, will fully assemble vehicles in its first phase, with components imported for local assembly. Việt Nam has offered incentives, including land rental support and worker housing construction, contingent on Skoda’s focus on high-tech and scientific innovation.

Skoda plans to sell two gasoline-powered models, including the Slavia sedan and Kushaq compact SUV, before rolling out electric vehicles. 

The company will face competition from established brands from Japan, South Korea and China, as well as domestic player VinFast.

Việt Nam's automotive sales reached 340,142 units in 2024, a 12.6 per cent increase from the previous year, according to the Việt Nam Automobile Manufacturers’ Association (VAMA). 

VinFast is not included in VAMA’s data. It sold 87,000 electric vehicles last year, 2.5 times more than the previous year. —VNS