The company was founded by Pavel Beneš, Miroslav Hajn, Jaroslav František Koch and Václav Malý in 1919 as the producer of civilian and military aircrafts. The company became part of Škoda in 1928. During the 1930s the factory became the biggest aircraft producer in Czechoslovakia and moved to Letňany. During World War II Avia produced aircraft for the German Luftwaffe. After the war the company was nationalized and became involved in the automotive industry. It manufactured aircraft up to 1963, then continued to make aircraft engines.
Soon after the War, the manufacture of fuel injection pumps, jets and roller bearings for freight vehicle transport was implemented in AVIA. The factory also provided repair of trucks. In frame of the Czechoslovak industry post-war reorganization it was subsequently decided that AVIA would be fully transformed into the manufacture of new trucks. As early as 1946 a prototype of the Škoda R-706 vehicle was developed, and the first vehicle and bus series was manufactured in 1947.
In 1965, structural changes of demand concerning a small tonnage lorry appeared both in national and international market. At the AVIA enterprise, they were considering two ways ahead, i.e. own development and/or use of a suitable licence strategy. As a conclusion, the French Renault-Saviem manufacturer’s offer for two types of trucks was accepted. In the autumn of 1968, the first products started to leave the assembly line. The new manufacture as well as its scope required new buildings as well as modernization of existing enterprise’s premises. New big buildings containing advanced equipment were constructed and thus AVIA was included among the largest Czechoslovak car manufacturers. The yearly production reached 17,000 vehicles. During the years, the manufacture of the AVIA vehicles was continuously modernized.
In 1986, the AVIA National Concern comprising also affiliates in Brno, Ivančice and Žilina was incorporated in a so-called “Industry Economical Unit” together with Praga, BSS, Metaz and Kutná Hora enterprises. As per 1 July 1988, a new state enterprise, AVIA Concern, comprising Avia, Praga, BSS, and Dačické strojírny concern enterprises was established in accordance with the State Enterprise Act. AVIA Letňany as the parent factory manufactured engines and cabs and assembled all of the chassis. The Brno, Ivančice and Žilina factories purpose superstructures were assembled on the chassis. The Kutná Hora factory manufactured all types of axles for AVIA vehicles. The key assortment of Praga Concern Enterprise included truck and bus gear units and a number of other parts for the automotive field. The Dačické strojírny Concern Enterprise produced parts for local car manufacturers.
In 1989, the concern split in single businesses. In 1992, AVIA was transformed into a stock company. One year later, the propeller manufacture was moved from the Letňany factory to the new premises near Stará Boleslav. This definitively terminated the aircraft production in Letňany. The 1995 public tender was won by a consortium formed by the South Korean DAEWOO company and Austrian STEYR company. The consortium bought 50.2% of AVIA's shares, thus becoming the majority owner of the Company. The year after, the trade name of the Company was changed to DAEWOO AVIA, a.s. In the same year, the Company became the exclusive importer and distributor of DAEWOO vehicles for the Czech Republic.
In 2007, a leading commercial vehicle manufacturer from India, Ashok Leyland, took over AVIA, after the bankrupt of Daewoo. The company has since been renamed Avia Ashok Leyland Motors (AALM).