Skoda on successful growth course

2011 was the best fiscal year so far in Czech car maker Skoda’s corporate history, setting new records in deliveries, sales and profit. Deliveries to customers rose by 15.3 per cent to 879,200 cars from January to December 2011 (2010: 762,600 units). At the same time, Skoda’s sales increased 18.1 per cent to 10.3 billion euro (2010: 8.7 billion euros), thus crossing the 10-billion-euros threshold for the first time. Operating profit improved by 66,1 per cent to 743 million euros (2010: 447 million euros). The company believes it is well prepared for the years ahead. It is aiming to raise deliveries to at least 1.5 million cars per year by 2018 thanks to new models and increased internationalisation. Led by the Citigo subcompact and the Rapid saloon, which is sold in India, the brand’s model offensive is now well on its way.

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“Our Skodagrowth strategy is bringing results,” said SkodaCEO Winfried Vahland at the company’s annual press conference in Prague. “We improved both in terms of deliveries and in financial terms, creating an excellent base for our growth course in years to come,” said Vahland. “My special thanks go out to Skodaoutstanding staff, for without them, such an impressive result would not have been achievable.“

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Growth in all sales regions

In 2011, Skodacars were in demand as never before: deliveries rose 15.3 per cent auf 879,200 cars, a new high. The brand grew stronger than the overall market in all sales regions and improved its market share in almost all individual markets. World market share rose to more than 1.4 per cent as at December 31st, 2011. Skodaachieved its strongest percentage growth in Eastern Europe, where it advanced 47 per cent. Russia was the strongest individual market in the region. Here, the brand’s sales rose by 62.5 per cent to 74,100 units (2011: 45,600). Asia was clearly marked by growth in 2011.

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A sales increase of almost 50 per cent showed Skodain especially rude health in India. In China, which continues to be Skoda’s largest market, the brand advanced 21.9 per cent to about 220,100 deliveries. Skodaeminently bucked the trend in Western Europe’s hotly contested market. While the overall market shrank by 1.5 per cent, Skoda’s sales advanced by 8.6 per cent. Skodamodels were especially in demand in Germany, where sales grew by 13 per cent. Sales were robust Central Europe’s otherwise declining markets, with the brand achieving a sales plus of 1.7 per cent in a difficult economic climate. In the Czech Republic, the brand is firmly entrenched as number one, with more than one in three cars sold bearing its distinctive winged arrow.

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An attractive model palette – ever more popular

Skoda’s excellent sales performance is mainly the result of its attractive model palette. “Outstanding design, a generous room offering, top-of-the-line quality, everyday and family practicality as well as an excellent price-to-value ratio, this is what makes our cars special,” said Vahland. “Our new models will create even more of a tailwind for us.” Skodacars are becoming increasingly popular with corporate customers, too. The brand sold more than 239,000 cars to fleet operators, a plus of 26.7 per cent. The Octavia confirmed its status as Skoda’s most popular model in 2011. The Octavia is the “heart of the brand”, its sales rising 10.7 per cent to almost 390,000. The Fabia made number two in Skoda’s internal sales ranking, clocking up 267,000 units (plus 16.5 per cent). The Skoda Superb cracked the 100,000-unit barrier for the first time last year, sales of the brand’s flagship rose by 18.1 per cent to about 117,000, of which 48,000 were sold in China alone.

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The Yeti compact SUV achieved the strongest growth of all Skodamodels: 33.7 per cent growth translates into more than 70,000 Yetis sold in 2011. Skodareckons it can sell more than 100,000 units of the car per year in years to come, one factor being production of the Yeti in China and Russia, which is set to begin in 2013. At 36,000 units sold, the Roomster posted an 11.4 per cent growth. Skoda’s number six and seven model lines, the Citigo subcompact and the Rapid Indian compact saloon, were off to an excellent start. The Citigo had its sales debut in its Czech home market in late 2011 and will be rolled out to European markets from May this year. The Rapid, first marketed from late 2011 in India, opens up the second-largest segment in the Indian market for the brand. The car was immediately voted India’s “Family car of the Year”.

2011 financial results

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Skoda’s success in sales is reflected in the brand’s financial figures, showing a company in excellent health again in 2011. Revenues rose 18.1 per cent to 10,3 billion euros, topping the ten-billion euro mark for the first time. Operating profit reached 743 million euros, and advance of 66,1 per cent or 296 million euros as against the previous year. Operating return on sales was 7.2 per cent.  “More than 10 billion euros in revenue and almost three quarters of a billion in operating profit, those are figures than confirm SkodaA profitability and financial solidity,” said Winfried Krause, SkodaChief Financial Officer. Profit before income tax was 783 million euros (plus 87.2 per cent), and 652 million euros after taxes. On the revenue side, Skoda’s favourable financial performance was down to increased sales, but also an improved model mix. On the expenditure side, additional cost reductions have helped. At the same time, the brand has increased its investments, with spending on plant rising by 165 million euros as against 2010 to reach 568 million euros. “Judicious investment in products, structures and capacity will be the basis for further growth,” said Krause.