Toyota is set to produce new hybrid vehicle models at its plant in Phu Tho province, near Hanoi, making Vietnam the fourth Asian country outside Japan to manufacture Toyota hybrids, following Thailand, Indonesia, and Malaysia.
According to the Vietnam Automobile Manufacturers’ Association (VAMA), hybrid car sales in Vietnam reached 9,785 units in the first nine months of 2025, a 70% increase compared to the same period last year. Toyota currently dominates the hybrid market in Vietnam, though hybrids still account for less than 3% of total new car sales.
To capitalize on this growth potential, Toyota plans to invest $360 million (approximately 9.5 trillion VND) to expand its production capacity in Vietnam. This investment will fund the installation of three additional steel sheet stamping presses (bringing the total to four), automate the painting process, and transition from oil-based to eco-friendly water-based paints.
By 2027, upon completion of these investments, Toyota’s annual production capacity in Vietnam is expected to double to 100,000 vehicles, up from the current 47,000.
“New car sales in Vietnam could reach 1 million units annually by 2030,” said Keita Nakano, Chairman of Toyota Motor Vietnam. This projection would position Vietnam ahead of Thailand and Indonesia, where growth has begun to slow.
Currently, new car sales in Vietnam for 2024 stand at around 500,000 units, based on VAMA data combined with figures from VinFast and Hyundai.
VinFast has emerged as a standout in Vietnam’s automotive industry, becoming the best-selling brand with 103,884 units sold in the first nine months of this year. Compact models are particularly popular in Vietnam’s densely populated urban areas.
VinFast has significantly benefited from government tax incentives. While hybrids face a special consumption tax of at least 35%—similar to conventional gasoline vehicles—electric vehicles (EVs) are taxed at just 1-3%. This policy keeps the base price of VinFast’s VF3 model around $13,000, making it far more competitive than rivals.
However, this landscape may shift as the government plans to reduce the tax on hybrids by 30 percentage points compared to gasoline vehicles. “This will lower hybrid prices by approximately 10%,” noted Mr. Nakano, though he added that strict conditions will apply, and not all hybrid models will qualify for the incentive.
Toyota is pursuing a diversified technology strategy, spanning traditional gasoline engines, hybrids, fuel cells, and electric vehicles. The company believes hybrids offer the best balance of affordability and environmental impact in Southeast Asia, where electricity is still largely generated from fossil fuels.
In Thailand, the region’s hybrid pioneer, sales reached 126,624 units in 2024, growing alongside electric vehicles, according to MarkLines data.
– 11:15 28/10/2025
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Revised Title:
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Revised Title:
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