Czech Republic: Skoda sees Russia and China becoming largest markets
Friday, March 14, 2008, AutomotiveWorld.com
The chairman of Skoda has told AutomotiveWorld.com that China and Russia could become the Czech brand's largest markets within five years.
Already, the company is boosting its dealer network in Russia with plans to add a further 150 outlets to the existing 100 by 2013, Reinhard Jung states.
The Volkswagen subsidiary has ambitious global sales goals and expects to sell more than 700,000 cars this year, Jung adds.
Jung was speaking as Skoda announced that its sales rose by 14.6% in 2007 to 630,032 units, with production rising 18.9% to 661,475 units. Western Europe, with 327,222 units, accounted for over half of all sales while a further 142,483 vehicles were sold in Central Europe last year.
"The growth was driven by our strong performance in Western Europe, where we raised market share to 2.2%, and growth in the key markets of India, Russia and China," Jung said.
Sales are expected to rise from 27,325 units last year in China to around 60,000, while in Russia, Skoda is forecasting 50,000 registrations compared to 27,515 in 2007, with the same number forecast for India, which would be a 100% rise year-on-year in the latter market. In Ukraine, another high-growth country for the brand, Skoda should produce more than 30,000 units this year.
But Jung cautioned that possible knock-on effects in Europe of a US recession and the strong Czech koruna posed serious risks.
As for new products, Skoda will launch the Superb sedan in June with sales expected to better the older model's 20,530 units of 2007, Jung said. Production of the Yeti SUV at Kvasiny will commence in H2 2009, he added.
Another focus for the company is to increase local content. In India, for example, the target is to source 50% of parts locally, he said.
Fred Kappler, Skoda's director of sales and marketing, said the company could launch production at another plant outside Europe.
"We could consider a new plant, probably in Asia, but not in the next two or three years. For now we have to focus on building up production at existing plants," he told AutomotiveWorld.com.
Skoda launched production at two plants in 2007 (Russia and China) and launched the second generation Fabia small car.
Kappler said an assembly plant in India would launch vehicle production in the first half of this year and a bodyshop and paintshop will be added.
A decision will also be taken this year about production at the Vrchlabi plant in the Czech Republic, where Volkswagen is considering producing a small car, he observed.
Skoda launches production of its Octavia at VW's Bratislava plant this month and plans to manufacture 25,000 units this year.
The company also says it has no plans to phase out the Octavia Tour (first generation Octavia) while sales stay above the 80,000upa level.
Martin Jahn, the board member for personnel, also noted that the company is seeing a trend towards more workers from outside Central Europe at its plants in the region. Of Skoda's 29,141 employees, more than 3,000 are foreign nationals, coming mostly from Poland and Slovakia, as well as 200 from Vietnam.
Published on Friday, March 14, 2008
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