SKODA continues to assail the Chinese market

As it stands on the cusp of a new era of growth, Skoda is keen to strengthen its position extensively, especially on the international markets. Skoda’s new exhibition at the 2011 Shanghai Auto Show highlights the brand’s ambition and emphasizes the importance of the Chinese market as the Czech car manufacturer’s largest market today. Alongside its current range of models, Skoda is unveiling a design concept incorporating elements of fresh, modern design architecture for future models together with the brand’s updated logo for the first time in Asia. Another highlight at more than 1,400 m2 large stand of Skoda in Hall E5 is the Skoda Octavia Green E Line. This electric concept car showcases the manufacturer’s innovative capability in the field of alternative propulsion.

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As it pursues its 2018 Growth Strategy, Skoda is keen to keep building on its Chinese success in the coming year. With this in mind, Skoda plans to starts the production of its compact Skoda Yeti SUV in China in 2013. This will be accompanied by a denser sales network, rising from the current 100 or so dealerships to approximately 400 outlets. Skoda is confident that these measures will significantly strengthen the profile of this entry brand in China and other growth markets.

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Skoda has never sold as many cars across the world as it did in 2010. The sales of 762,600 units were 11.5% up on 2009. Winfried Vahland, the Skoda chairman, expressed his great satisfaction, noting that “Skoda performed exceptionally well in 2010, with sales chalking up double-digit growth. Few could have predicted just how well we would progress in China, a market we entered only four years ago.” This positive trend continued abated in the first three months of 2011. Worldwide sales of the Skoda brand from January 2011 to March 2011 increased by 21.4% on the same period last year. In China, Skoda strengthened its position in the first quarter by 27.4%, selling an aggregate of 54,400 cars.

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The company’s chairman believes that last year’s good results stand the Skoda brand in good stead as it seeks to grow in the next few years: “The new Skoda Growth Strategy will see sales double. We plan to sell at least 1.5 million vehicles worldwide in 2018.” In the future, the company would like to make over half of its sales outside Europe. The range of models should be expanded significantly in the coming years as the company pursues this sales policy. “In the major world markets, we want to be the benchmark among cars combining space, value for money and smart solutions,” emphasized Vahland. By the end of the decade, the Skoda boss projects that the global passenger car market will have expanded to around 85 million units per year, with China alone accounting for more than 20 million.

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Skoda’s board chairman expects competition in China to become much tougher: “The competition is set grow, but we have carved out an excellent starting position for ourselves. In China, Skoda boasts attractive models adapted to the local market, a dense sales network and broad support from the Volkswagen Group. What is more, we stand to benefit from a high proportion of local production and close cooperation with local business partners and organizations.”

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Skoda points to the highly successful advances over the past four years as proof of its performance in China. The brand entered the local market in 2007 when production of the Skoda Octavia was launched at Shanghai Volkswagen. This was followed shortly after by the start of production of the Skoda Fabia and Skoda Superb models. In late 2010, an agreement was signed for the licensed production of the Skoda Yeti as the fourth Skoda model to be manufactured in China. “This success story demonstrates our company’s potential in the world’s fastest growing market. We want to build on this in the coming years by investing in the market and products,” says Winfried Vahland.

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