Thaco gets in gear for Mazda collaboration

Japan’s auto brand Mazda is setting up shop ahead of the ASEAN zero tariff on auto imports, effective from 2018

The project was mentioned in a message from Thaco chairman Tran Ba Duong, which was sent to employees in early February 2016 following their return to work after the Lunar New Year holiday.

As part of a co-operative deal with Japan’s Mazda Company, the project will aim to manufacture and assemble 100,000 Mazda vehicles per year, with an annual capacity of 50,000 vehicles in the first phase. It will be based in the Chu Lai-Truong Hai automotive engineering complex in the central province of Quang Nam.

Although the project details as well as capital contribution ratios of Thaco and Mazda are currently withheld, Duong could reveal that the project is scheduled to begin operation in 2018.

“2018 is also the year that auto import duty from ASEAN will plunge to zero per cent, and the door will be left totally open to imported car brands from the bloc,” Duong said, adding that it might take about 18 months to finish construction.

To prepare for the fresh co-operative project between Thaco and Mazda, a handful of Mazda’s satellite businesses have already come to the Chu Lai-Truong Hai complex seeking investment opportunities. Most recently, 46 businesses that supply parts for Mazda came to Chu Lai-Truong Hai complex in mid-February.

“We expect to draw more and more of Mazda’s satellite firms to Vietnam to help form a strong supporting industry system for Mazda cars here in Vietnam,” Duong said.

Thaco currently engages in the assembly and distribution of cars for three brands – Kia, Mazda, and Peugeot. The cars are assembled at its existing facility also based in the Chu Lai-Truong Hai complex.

While explaining the plan to build a new factory for Mazda automobiles, Duong said the existing factory could only meet the demand for car assembly and manufacturing for two years more at most before facing overload.

While using the new plant to turn out 50,000 Mazda cars per year in the first phase, Thaco is considering using their existing plant to assemble Peugeot vehicles rather than leave it unused.

Last year, as many as 20,359 Mazda cars were sold in Vietnam, a 116 per cent jump on year. In January 2016 alone, 2,873 Mazda cars were sold by Thaco, a 62 per cent on-year rise, setting the first-ever January sales record since Mazda cars appeared on the Vietnamese market in 2012.