Quang Ninh Province, Vietnam – Czech automotive giant Škoda Auto, a subsidiary of the Volkswagen Group, has officially launched its state-of-the-art production facility in Vietnam in collaboration with its local partner, the Thanh Cong Group. This strategic move underscores Škoda's commitment to expanding its global footprint, particularly in burgeoning markets beyond its European stronghold.
Located in Quang Ninh province, strategically near the port of Haiphong – a major and modern shipping hub in Vietnam – the new plant will initially focus on the assembly of two key models: the Škoda Kushaq SUV and the Slavia sedan. These vehicles will be assembled using Completely Knocked-Down (CKD) kits shipped directly from Škoda Auto’s advanced logistics center in Pune, India. This streamlined supply chain leverages the synergies between Škoda’s Indian operations and its ambitions in the wider Asian region.
Andreas Dick, Škoda Auto Board Member for Production and Logistics, emphasized the significance of this development, stating, "The new manufacturing facilities fully reflect Škoda’s high manufacturing benchmarks. The plant’s prime location near the Haiphong port ensures the swift delivery of CKD kits from our logistics hub in Pune, India, while also strengthening the synergies that are vital to Škoda’s success in Vietnam and the wider region."
Production of the Kushaq SUV has already commenced, with the assembly of the Slavia sedan scheduled to begin this summer. The expansive assembly line is complemented by a comprehensive quality control center, a cutting-edge precision measurement facility, and a dedicated test track designed to simulate the diverse road conditions prevalent in Vietnam.
Beyond the final assembly, the new facility is equipped with advanced manufacturing technologies, including a welding shop and a paint shop. Škoda has invested in state-of-the-art production technology, such as contactless 3D measurement for unparalleled precision, a robust four-layer paint application process for a premium finish, and advanced anti-corrosion treatments to ensure the longevity and durability of their vehicles in the local climate.
The Kushaq SUV and Slavia sedan models destined for the Vietnamese market have been specifically designed with left-hand drive configurations and are equipped with a range of modern safety and comfort features tailored to local preferences. These include adaptive cruise control and blind spot monitoring, reflecting Škoda’s commitment to providing vehicles that meet the needs and expectations of Vietnamese customers.
These locally assembled models will form a crucial part of Škoda’s Vietnamese portfolio, which also includes the Karoq and Kodiaq SUVs, currently imported from Europe. Since establishing its presence in Vietnam in September 2023, Škoda has rapidly expanded its retail network, with over 15 sales outlets already operational. The company has ambitious plans to further increase this number to 32 by the end of the current year, demonstrating its strong commitment to the Vietnamese market.
This expansion into Vietnam is part of Škoda’s broader strategy to enhance its global presence and leverage the capabilities of its Indian production facilities for growth in other international markets, including the Middle East.
This strategic expansion comes on the heels of a strong financial performance for Škoda Auto in the financial year 2024. The company reported a 4.7% increase in sales revenue, reaching €27.8 billion. Notably, its operating profit surged by an impressive 30% to €2.3 billion, resulting in a healthy return on sales of 8.3%, a significant increase from the previous year’s 6.7%. This financial strength provides a solid foundation for Škoda’s continued global expansion initiatives, such as the new plant in Vietnam.
The inauguration of this production facility marks a significant milestone for Škoda Auto, solidifying its position as a global player in the automotive industry and demonstrating its confidence in the growth potential of the Vietnamese market and the broader ASEAN region.
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