21 Mar 18

'Too successful' Skoda needs more output

2017 was the most successful year in Skoda's history, which set new records in both global vehicle deliveries and financial results. Deliveries increased by 6.6% to 1,200,500 vehicles, while sales revenue rose by 20.8 percent to €16.6 billion. The best figure, however, is probably the operating profit: it jumped to €1.6 billion, an increase of 34.6% over the previous year.

A major contributor to Skoda's success is the Kodiaq, for which the Czech brands is struggling to keep up with demand. At a certain point, delivery times were 9 months. It's baby brother, the Seat Ateca-sized Karoq, suffers the same 'issue', which apparently gave it a local nick name, 'zarok', meaning "in one year". 

Wanted: more production capacity

Actually, Skoda could have sold and delivered even more vehicles if it had the production capacity. Sources within the group said Skoda could miss out on about 360,000 car sales by 2020 if capacity is left unchanged, according to Automotive News.

Part of the solution could be boosting the output of the current manufacturing sites. Skoda has offered to create 3,000 jobs in the Czech Republic if labour leaders agree to additional shifts at the two plants. That could boost output at Mlada Boleslav alone by 83,000 cars a year, Skoda management said.  

Another solution resides in utilising under-used capacity within the VW Group, such as the Wolfsburg plant. A perhaps more likely scenario, however, would be investing in a new facility outside the Czech Republic where production could be shared with other VW brands.

Electrify the world, but China first

By 2025, the Czech VW subsidiary wants to expand its global presence to 120 countries, from about 100 today. Over the next two years, Skoda will be launching a total of 19 new vehicles, including the production version of the Vision X concept car which celebrated its world premiere at the Geneva Motor Show two weeks ago.

Among the new models are the the Citigo EV and the Superb PHEV, the brand’s first all-electric and plug-in hybrid model, respectively, both set for launch in 2019. Also starting next year, Skoda will be producing electrical components for other Group brands. The series production of the Vision E, a purely electric coupé-esque SUV, will follow in 2020.

Today, China is Skoda's biggest market. In an ever more environmentally conscious People's Republic, electrification is paramount for any carmaker that wants to keep or strengthen its market position. "Skoda will offer its new energy vehicles in the Chinese market before introducing them into other markets," Skoda CEO Bernhard Maier stated at last year's Geneva Motor Show.

Picture copyright: Skoda, 2018

Authored by: Dieter Quartier