Japan’s auto giant Isuzu drives localization, green shift in Vietnam

The Japanese automaker initially invested around US$50 million in Isuzu Vietnam – a Japan-Vietnam joint venture – to develop local production, expand its supplier network, and promote cleaner technologies in line with its global net-zero emission target by 2050.

Toan, who oversees sales and after-sales services, said the company currently produces commercial trucks entirely in Vietnam, while pickup trucks and SUVs are imported.

The localization rate ranges from 17 to 50 percent depending on vehicle type, with higher levels achieved in specialized models such as cranes and garbage trucks.

Toan emphasized that true localization requires large-scale production to make local parts cost-competitive.

“Isuzu collaborates with Vietnamese partners like Thaco to have key components supplied, including leaf springs, seats, and glass. All locally sourced parts undergo strict quality assessments by Japanese experts before being used in production,” he stated.

The company also plans to gradually expand local sourcing to include more advanced components such as electronic parts and engine accessories.

Since receiving its investment license in 1995, Isuzu Vietnam has produced nearly 130,000 vehicles and grown to around 500 employees, with a nationwide network of 1,800 staff across dealers and service centers.

Despite intensifying competition from low-cost Chinese trucks, Toan views the challenge as motivation for innovation rather than a threat.

“Low prices may attract buyers in the short term, but long-term trust comes only from quality,” he noted.

As part of its green transformation roadmap, Isuzu is studying Vietnam’s infrastructure readiness for electric and hydrogen-powered vehicles.

The company already launched a light-duty electric truck in Japan and North America in 2023 and plans to expand to other markets, including Vietnam.

When the conditions are right, Toan said, Isuzu could assemble electric trucks at its existing Vietnamese factory without requiring major new investment.

In collaboration with Honda, Isuzu is also developing heavy-duty hydrogen trucks with a total load of over 25 metric tons, aiming to help ‘green’ global logistics chains and meet stricter environmental standards from major ports and export markets such as Europe.

The two companies plan to begin pilot operations in select Asian markets before full-scale rollout in the early 2030s.

Vietnam is among the top three global markets to receive Isuzu’s new technologies early, following only Japan.

The company was the first automaker in Vietnam to introduce the common rail diesel system in 2008, years ahead of the country’s emission standard upgrades, and continues to lead in clean technology adoption.

Toan emphasized that for Vietnam’s auto industry to thrive in the green era, stronger government policies are needed to support domestic parts suppliers and encourage the development of supporting industrial clusters.

While Isuzu Vietnam continues expanding its dealer network with nearly 30 outlets nationwide and plans to add four to five each year, limited land availability and lengthy licensing procedures remain major barriers.

“Truck dealerships require large sites often outside urban areas, but many of these lands are still classified as agricultural,” Toan explained.