November Czech-Up: A Skoda News Round-Up

With strong sales and a slew of awards, Skoda continues to wow both the public and motoring critics. Our November round-up looks at what’s been happening at the Czech company over the last few months.

Skoda’s record sales…

Despite the storms faced by European car manufacturers, Skoda has had a stunning 2018 so far. Let’s take a look:

Where is this growth coming from? Although sales are up across virtually all countries, Skoda is selling especially strongly in China. April, for example, saw a 34% increase in Skoda’s Chinese sales over the previous year, and almost one in three of their vehicles was delivered to the Chinese market. Russia and Eastern Europe are also fast-growing markets showing double-digit growth.

…and strong profits.

Of course, it’s not much use to a company if their sales don’t translate into profits. But here too, Skoda is forging ahead. According to a report in Bloomberg:

Skoda’s 9.7 percent operating margin is about double that of a typical mass market brand. It’s more profitable than VW’s Audi on that metric, and is second only to Porsche among the VW brands with disclosed earnings.

All this means that Skoda turned an operating profit of 821 million euros for the first half of 2018. Phew!

The principal reason that Skoda can achieve this is because it has comparatively low overheads. Czech auto workers are paid less than their West European counterparts, keeping Skoda’s manufacturing costs down.  As we reported a little while back, Skoda’s increasing profitability can be a source of tension within the VW Group.

The People’s Choice, the Critics’ Choice

Ultimately, Skoda sales are soaring because they make affordable cars that people like. This is reflected in the accolades their cars receive from public and pundits alike.

For example, the seven-seater Kodiaq scooped the Honest John Car of the Year award. That’s not a win within a category, mind you, but their overall Car of the Year. Significantly, the Kodiaq wasn’t chosen by a panel of experts — the award is based on how much interest it created for the site’s 2.3 million annual visitors. The site owners commented:

Comfortable, spacious and well-equipped, the KODIAQ is everything an SUV should be. Its popularity has grown steadily with the readers of HonestJohn.co.uk over the past 12 months and it’s easy to see why our audience hold the KODIAQ in such high regard.

However, motoring pundits also hold Skoda in high regard. What Car, for example, voted the Citigo their Used City Car of the Year and the Fabia their Used Small Car of the Year.

Looking to the Future

What’s next for Skoda?

We know that, in the face of growing European legislation, car manufacturers need to rapidly electrify their range. Skoda seems well-placed to meet this challenge. The market is crying out for an affordable electric SUV, and that’s what Skoda have promised by 2020. Few details are available yet, but their as-yet-unnamed crossover should have a range of over 300 miles and substantive autonomous capabilities.

In addition, the popular Fabia and Superb range are getting a revamp over 2018 and 2019, and petrolheads get their own SUV to play with — a vRS version of the Kodiaq is upon us.

It all adds up to a thriving car company that’s showing no signs of slowing down.

Whether your vehicle is Skoda, VW, Audi or SEAT (or any other marque), Welsh VW Specialists are here for your MOT, servicing and repair needs. Please get in touch with our friendly team.