Toyota Motor plans to start manufacturing hybrid vehicles in Vietnam as early as 2027 at its Phu Tho province plant, near Hanoi.
According to Nikkei Asia, the Japanese automaker intends to invest approximately $360 million to boost its local production capacity. The expansion includes installing three additional press machines for shaping steel sheets, raising the total to four. The funds will also support automation of the painting process and a transition from oil-based to more environmentally friendly water paints.
The enhancements are expected to be finalized by 2027 or later, enabling annual production capacity to rise from the current 47,000 units to approximately 100,000 vehicles.
Between January and September 2025, Vietnam recorded sales of 9,785 hybrid vehicles, reflecting about a 70% increase compared to the same period last year. Despite this growth, hybrids still account for less than 3% of new vehicle sales, according to the Vietnam Automobile Manufacturers’ Association (VAMA), with Toyota holding the majority of the country’s hybrid market.
Vietnam will become Toyota’s fourth Asian hub for hybrid production outside Japan, following Thailand, Indonesia, and Malaysia. Keita Nakano, president of Toyota Motor Vietnam, stated that new-vehicle sales in the country could hit one million annually by 2030.
Meanwhile, Vietnam is anticipated to reduce the tax on hybrid vehicles by 30% compared to gasoline cars, which Toyota predicts could bring hybrid prices down by about 10%. However, the tax cut will come with strict eligibility requirements.
Toyota also intends to offer a range of propulsion options in Vietnam, including gasoline, hybrid, fuel-cell, and battery-electric vehicles, seeing hybrids as a practical compromise between affordability and environmental benefits in Southeast Asia.
Earlier this month, Toyota signed an agreement with Sumitomo Metal Mining Company to enhance cooperation in developing and mass-producing cathode materials for all-solid-state batteries (ASSBs) for electric vehicles.
The automaker plans to introduce a new battery electric vehicle (BEV) model equipped with ASSBs in the 2027–2028 fiscal year.
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