Former Czech PM asks government to speak with Volkswagen about future of ŠKODA

[ZacDaMan72]

https://english.radio.cz/former-czech-pm-asks-government-speak-volkswagen-about-future-skoda-8696405

 

Very interesting article. While I'm taking this with a pinch of salt as the comments were made by the ŠKODA trade union, things like "the chief strategist of Volkswagen, Michael Jost, “hates Škoda” and “is actively moving against it”. Several stories have also appeared in Czech media this year suggesting that the newly appointed head of Škoda Auto, Thomas Schäfer, has been tasked by Volkswagen to “cut Škoda’s wings“ and make it a cheaper car brand aimed at competing with Renault’s Dacia in developing markets" is pretty concerning.

[MikeTheThinker]

The VAG Group's market strategy has always been a spread of offerings from lower cost lower margin to higher cost higher margin.  Audi has been the flagship marque with all the toys and (allegedly) flashy looks, followed by VW as the "sensible" or "family" brand, then Seat as the "young person's" brand and Skoda as the "economical, reliable but not flashy" brand.

 

Various things have happened that probably come under the "laws of unintended consequences" for VAG, including changing reliability figures putting Skoda above Seat above VW and way above Audi, the "dieselgate" scandal which has hit Audi and VW brands hard, harder economic times making buyers more concerned about value for money than bling and the outright success of the Skoda and Seat brands themselves. 

VAG accountants are looking hard at Margin Return (ie, how much profit they get to keep from selling a vehicle) and MR for Audi especially and VW is being reduced by market pressure on selling prices and the cost of after sales support (reliability).

 

A major influence in the car sales market is fleets, where fleet managers are looking harder and harder at the cost of ownership - and the likes of Skoda are coming out well.  Skoda's own "blinging up" of its offerings is making them more attractive to fleet car drivers which also adds to the pressure.

 

Then of course there's the EV shift, which is adding further buggerance to the market.

 

Despite the public image VAG likes to portray of everyone working together in harmony stories from insiders tell of bitter battles between the boardrooms of the various marques who are fighting for prominence, and I expect this will continue until the markets get past the shakeout that's gathering pace now - EVs, Covid, economic downturn, decline of the US empire, rise of European influence and the rise of the Chinese Empire. 

 

It's going to be an "interesting" ride ...

 

Edited 10 October, 2020 by StickyMicky
reformat

[Ootohere]

Skoda is very much the poor relative of the VW Group and VW have penny / euro pinched with Skoda and drive down the standard equipment that comes with Skoda's.

 

The only thing is the price of Skodas do not drop and there is less value for money on offer at the lowest priced vehicles on offer.

Stupid RRP's in the UK as with SEAT and then the need to be giving discounts to get some models punted, so no change there with the VW Group.

http://briskoda.net/forums/topic/474623-skoda-to-become-more-of-a-budget-brand

 

[ZacDaMan72]

Well in the past 5-7 years they’ve had a bit of a ‘rags to riches’ story, it’s unfortunate to see Volkswagen’s directive to ‘put them back in their place’ in my opinion. Of course many people here will disagree, but ŠKODA’s rising popularity especially outside of Europe has been because of their increase in premium features and perceived value for people coming from outside the brand. Most people new to the brand have been cross-shopping brands like VW Volvo and Peugeot, not Dacia.

Unfortunately ŠKODA’s rise in popularity has come at the cost of the “golden child’s” sales so VW have to protect them by neutering ŠKODA. 

[Ootohere]

Or to spin it the other way.

VW Group want more sales globally from Skoda in the markets where they are not able to sell them cheap enough. 

The Premium thing is just not really doing that well.

[ZacDaMan72]

Since you want to go into numbers, Volkswagen Passenger Cars had a 4.5% increase in sales revenue while ŠKODA had a 14.5% increase. ŠKODA also has almost double (8.4%) compared to Volkswagen Passenger Cars (4.3%) on operating return on sales. Not to mention the 1% decrease in sales of Volkswagen, while ŠKODA had a 11% increase... Maybe they should look at themselves before trying to undermine ŠKODA 

Edited 11 October, 2020 by ZacDaMan72
forgot to define figure

[Ootohere]

Diesel sales are greatly reduced and the push is on to get the Mild Hybrids sold & the Full EV's.

 

Skoda are not going to be selling many Citigo EV's in Europe if any, and sold 400 in the UK before discontinuing them and there is only going to be 1 other EV for a while which is the Enyaq which you can not even order yet.

VW is up and going with the ID3 and the ID4 is not far behind.

VW like Skoda producing parts for the brand and turning out vehicles that can sell.   

 

 If the demand and waiting list for Skoda exceeds production and there are very long waiting lists then the VW Management board are getting things badly wrong.

[ZacDaMan72]

5 hours ago, e-Roottoot said:

 If the demand and waiting list for Skoda exceeds production and there are very long waiting lists then the VW Management board are getting things badly wrong.

2019 annual report for ŠKODA says that  In Europe, they could sell significantly more vehicles if they had enough production capacity. The trust showed by the Volkswagen Group in the ŠKODA brand also led to the Company being charged with the management of the Russia region. In light of the full utilisation of its production capacities, the Company worked strenuously to increase the effectiveness of production and ensure additional capacities, for example at other Group production plants. The Company was also involved in preparing a project to develop a new multi-brand production plant. The final location has still to be confirmed and construction is awaiting approval. 

 

They also ended up producing more SEAT Atecas than Karoqs (+3631) and will be heading the development and production of the B9 Passat alongside Superb Mk4. As you know and mentioned, ŠKODA is producing a lot of drivetrain components for the whole Group -  387,101 MQ200 gearboxes, 182,200 MQ/SQ100 gearboxes and 555,858 DQ200 gearboxes plus 568,825 engines, 3,975 batteries for plug-in hybrids and 1.83 million axles

Edited 11 October, 2020 by ZacDaMan72

[Ootohere]

Covid 19 might change many things yet, then the UK is out of the EU now, & changes are coming in 2021 as far as exports and imports.

Even though Skoda only first register under 90,000 new cars a year in the UK and many are not sold new to customers just to VW Finance and Dealerships for sale as used.

 

So Skoda is a low volume seller in the UK and there is the need for Skoda to get lower average emissions in the UK & the EU.

Just as well they might get more Kamiq & Scalla sold and that again you can get Fabia with a DSG and as an estate because they have been losing sales there, just as they have lost with the Citigo / Citigo EV. 

(Lighter / lower / less polluting vehicles than some of the bigger / heavier / higher models trucking about with 1 or 2 people in that only produce less emissions under the WLTP and not in the actual real world on real roads.)

Edited 11 October, 2020 by e-Roottoot

[ZacDaMan72]

They are planning to achieve that with all the same fuel saving tech from VW i.e. mild/plug-in hybrid and emissions reducing devices like the double SCR injection for TDI engines. Why they are not rolling out more BEV cars I’ve no idea, but really the UK is just not seen as that important to ŠKODA for whatever reason. 

[Ootohere]

So back to the OP.

Skoda is not seen as that important to VW for some reason, as spotted by Ex Politicians & even the deaf dumb or blind.

Hyundai seem to put more investment into the Czech Republic and get better employees and management that pay more attention to quality control.

[ZacDaMan72]

I wouldn’t see them as not being important given how much gross profit they create for the group, and the production of components for other Group cars. But it is clear that Volkswagen doesn’t want ŠKODA to take their market placement. I reckon Volkswagen should remember that they are the people’s car and thus should reconsider how not just SEAT and ŠKODA are placed within the market, but themselves. Is an Arteon really fitting of a “people’s car” nameplate? At least the Superb was seen as a luxury car before WWII

[Ootohere]

OK,  so this kind of stuff comes from 'The horses mouth'. 

 Ignore the man he has no say in anything obviously...

[ZacDaMan72]

Yeah, it’s contradicted by the work union though. Clearly we won’t be able to see the whole story but nothing wrong with speculation. 

[rkenny]

Below is a link to an interesting article from Autorevue.cz. It is in Czech but Google translate will give you a good sense of the article.

 

https://www.autorevue.cz/thomas-schafer-sef-skody-auto-nova-fabia-combi-vypada-fakt-dobre-levne-modely-jsou-ve-hre

 

It is a wide ranging interview with the new Skoda boss Thomas Schaffer. He explains some of his philosophy, how Skoda will go forward and the importance of new electric models. For myself I was very pleased to read that the new Fabia Mk IV will, after all, have an estate version. He is a big fan of the Enyaq!