Toyota Tsusho announced on June 9th that it has established Toyota Tsusho Manufacturing Laos (TTML), a new company that will engage in vehicle assembly operations in the Lao People's Democratic Republic (Laos).

The company will serve as a production base for assembling and supplying vehicles for the domestic market, with production scheduled to commence in April 2028. The project represents Toyota Tsusho's entry into local vehicle production in Laos through knock-down (KD) assembly, under which vehicles are imported as component kits and assembled locally rather than being imported as fully built units. The company plans to make phased capital investments and develop local human resources as part of the project.

TTML has been established with capital of approximately US$ 15.7 million. Toyota Tsusho holds an 81% stake in the venture, while Toyota Laos owns 10% and local partner Sokxay Group holds the remaining 9%. The assembly facility will be located in Vientiane Capital, in Xaythany District.

Toyota Tsusho began operations as an authorised Toyota distributor in Laos in September 2018, following Toyota Motor's transfer of its sales operations in the country to the trading company. Since then, Toyota Tsusho has focused on expanding its sales and service network and business operations in the market. The addition of local production will enable the company to extend its activities beyond sales and after-sales operations, creating a value chain covering parts procurement, assembly, sales and vehicle servicing.

The decision to establish local assembly operations comes amid continued growth in Laos' new vehicle market, driven by population growth, economic expansion and increasing motorisation.

Demand for vehicles is expected to continue rising, while the traditional model of importing fully built vehicles has presented challenges related to price competitiveness and supply stability. Toyota Tsusho plans to address these challenges through a local production-for-local-consumption structure tailored to the Lao market.

The company plans to utilise vehicle assembly experience gained across Asia, the Middle East and Africa to establish a production system that imports vehicle components and assembles them locally. Annual production is expected to exceed 5,000 vehicles, with key models including the Hilux pickup truck and Fortuner SUV.

The Hilux is used across Southeast Asia for commercial and utility applications, including construction, agriculture, rural transportation and small business operations. The Fortuner, which shares a body-on-frame platform with the Hilux, is positioned as an SUV with a greater emphasis on passenger comfort and family use. Both models are widely used in the region and are suited to local operating conditions.

Through local assembly, Toyota Tsusho aims to improve price competitiveness and provide a more consistent vehicle supply for customers in Laos. The project is also expected to create approximately 150 local jobs and contribute to the development of manufacturing skills and human resources in the country.

The company intends to utilise its capabilities in procurement, logistics, production management, sales and after-sales service to establish a value chain covering these activities. By integrating these functions, Toyota Tsusho aims to expand its presence in the Lao automotive market over the long term.

While the planned production volume of more than 5,000 vehicles annually is relatively modest by global automotive standards, the investment forms part of Toyota Tsusho's strategy to increase its activities in a market where affordability, durability and service support are purchasing considerations.

Toyota Tsusho has identified the expansion of its mobility business as a priority under its Mid-term Business Plan. The Laos assembly project forms part of this strategy and is intended to support the development of the country's mobility industry while contributing to job creation, skills development, and economic and social development.