Thaco chairman Tran Ba Duong said the corporation has mapped out plans to build new auto manufacturing and assembly factories of Kia and Mazda passenger cars, high-end passenger cars, buses, trucks and automotive accessories to raise the localization rate to 40%. Under ASEAN trade commitments, autos are subject to zero tariffs in regional trade if local content reaches 40%.

Thaco said the new factory is equipped with a state-of-the-art assembly line, including welding and painting technologies matching the Mazda facilities in Japan. The assembly line is 80% automatic, the company said in a statement.

The factory, which also has a test-drive road stretching 2.4 kilometers and modelled after real-life terrains, has won certification from the Ministry of Industry and Trade as having met all criteria set out in Decree 116/2017/ND-CP of the Government. 

In 2011, Thaco built the first Vina Mazda factory with an annual capacity of 10,000 cars. The factory put into operation in 2012 has produced 100,000 Mazda autos for local consumption.

In related news, South Korean automaker Hyundai Motor and Vietnam’s Thanh Cong Group have signed a memorandum of understanding expanding the manufacturing and assembly of Hyundai autos in Vietnam, news website Vneconomy reports. The two sides will join hands to develop the second Hyundai auto plant in Ninh Binh Province.

According to Hyundai Motor, Vietnam is among countries having the highest growth potential in Southeast Asia. This will be the solid basis for Hyundai Motor to promote and expand business in the region, with the center being Vietnam.

At present, the joint venture between Hyundai Thanh Cong and Hyundai Motor is operating an auto plant in Gian Khau Industrial Zone in Ninh Binh Province, with a total capacity of 60,000 units a year. The plant manufactures and assembles some of Hyundai’s best-selling makes like SantaFe, Elantra, Grand i10, Tucson and New Porter 150.

Nguyen Anh Tuan, chairman of Thanh Cong Group, said the group is making efforts to kick off the second Hyundai auto plant in Vietnam as soon as possible.

With its expansion plans in Vietnam, Hyundai Thanh Cong is bucking the trend. While many automakers have stopped assembling a number of models in Vietnam and replaced such cars by imports to take advantage of free-trade incentives, Hyundai Thanh Cong has chosen to boost production.

Such strategies to focus on domestic production of Hyundai Thanh Cong and some other local automakers like Truong Hai Auto Corporation and VinFast Trading and Production Company Limited are receiving support from consumers and are aligned to the Government’s strategy for developing the domestic auto industry.