Japan's Toyota, Surprised by Homegrown VinFast, to Invest an Additional 400 Billion Won in Vietnam... A Bold Move to Produce Electrified Vehicles Locally

【Hanoi, Vietnam = Correspondent Jun-seok Kim】Toyota Motor Corporation is investing more than $283 million (approximately 388.4175 billion won) in Vietnam to expand its local production capabilities. In particular, the company appears poised to develop Vietnam into a new hub in its Southeast Asian production network by investing in facilities designed to produce electrified vehicles, including hybrids.
Toyota Motor Vietnam established a local joint venture in September 1995 and began assembling and producing vehicles locally through the completely knocked-down (CKD) method at its Phuc Yen plant in Vinh Phuc Province in 1996. The latest investment is understood to be an additional investment aimed at expanding the plant's production capacity.
According to local media on the 2nd, Toyota Motor Vietnam received approval from the People's Committee of Phu Tho Province on the 29th of last month to amend its investment policy. It also obtained approval from the provincial Department of Finance for the 12th amendment to its investment registration certificate.
The project covers the assembly and production of vehicles and parts, warranty and repair services, and the import of fully assembled vehicles. The scope of the business has also been expanded to include the production of electrified vehicles and related parts.
The project site covers 28.6 hectares, with annual production and assembly capacity of approximately 52,000 vehicles.
Toyota said it plans to begin construction of a paint shop and a press shop in May 2027. The company plans to apply the latest technologies and automated equipment to increase production capacity and quality while improving energy efficiency. Both facilities are scheduled to begin operations in 2029 and are expected to serve as the foundation for producing new models locally in Vietnam through the CKD method.
The investment is seen as targeting Vietnam's growing automotive market. Toyota Vietnam produced 25,200 vehicles in 2025, while sales of Toyota and Lexus vehicles totaled 74,206 units that year. The strategy is analyzed as an effort to improve the company's ability to respond to domestic demand by expanding local production capacity, while also securing a foundation for producing electrified vehicles in the future.
Last year, Vietnam's automotive market surpassed 600,000 vehicles in cumulative sales for the first time, reaching a record high of 604,054 units. Competition in the market has intensified, particularly after homegrown electric vehicle brand VinFast overtook Toyota Motor Corporation and Hyundai Motor Company, previously the leading automakers in Vietnam, to become the market-share leader. Industry observers say Toyota's direct challenge to secure market leadership has begun in Vietnam, the fastest-growing market in Southeast Asia.
Meanwhile, Toyota has identified Southeast Asia as a key growth market and continues to make large-scale investments in neighboring Thailand.
Toyota is reportedly planning to invest more than 55 billion baht (approximately 2.2704 trillion won) over the next five years to convert its production lines in Thailand to hybrid vehicle production.
Thailand is a key production and export hub for Toyota. The Toyota Samrong Plant, Toyota Gateway Plant, and Ban Pho Plant have a combined annual production capacity of 770,000 vehicles. In 2025, Toyota produced 564,933 vehicles in Thailand and exported 358,135 of them.
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