Chinese automaker Zhejiang Geely Holding Group has signed an agreement with Vietnamese vehicle distributor Tasco Auto to establish a joint venture for the production of Geely vehicles in Vietnam.

The news followed an announcement earlier this month by Tasco Auto, known until the end of last year as SVC Holdings, it had agreed to distribute Geely’s Zeekr-branded battery electric vehicles (BEVs). Last year Tasco also signed a local distribution agreement with Geely’s Lynk & Co unit.

Tasco said in a statement: “This is an important event that continues to strengthen the relationship between Geely and Tasco, progressively realiaing Geely’s market expansion plans in south east Asia and Tasco’s goal of advancing upstream in the automotive industry.”

A three way memorandum of agreement on strategic cooperation was also signed by Tasco, Geely and the Economic Zone Management Board of Thai Binh Province where the new production facility will be built.

The joint venture will initially assemble completely knocked down (CKD) vehicles imported from Geely operations in China. The facility will have an initial capacity to produce 75,000 vehicles per year for the local market and for export to other markets in south east Asia.

Tasco said it will collaborate with Geely to attract investment in components and spare parts in the country to help ramp up local content.

The two partners will also jointly invest in the construction of an automotive R&D centre for the south east Asian region and establish a university for automotive technical training. The company also said they will invest in the production of systems “specifically designed for vehicle human connectivity in the Tien Hai Economic Zone”.

Total investment in the project is estimated at around US$168m with Tasco contributing 64% of the capital and Geely Group 36%. The plant will initially assemble vehicles under the Lynk & Co and Geely brands with the potential to add other group brands later.

The plant is expected to break ground in the first half of 2025, with the first models scheduled to be delivered to customers in early 2026.

Tasco said the choice of the plant’s location reflects the significant economic advantages on offer, including government incentives, convenient transportation and proximity to seaports.

Speaking at the signing ceremony, Ngo Dong Hai, secretary of the Thai Binh Provincial Party Committee, said: “The strategic cooperation between Tasco and Geely in Thai Binh comes at a very opportune time. The Vietnamese automobile market is full of potential, with a car ownership rate of about 63 vehicles per 1,000 people compared to over 300 vehicles in Thailand. The Vietnamese vehicle market is expected to grow at an average annual rate of 14%-16% by 2030 with total car consumption reaching 1m to 1.1munits and by 2045 this is projected to increase to 4.5m to 4.7m vehicles.”