Skoda will focus on cheaper cars, says the expert

How did Škoda Auto perform in sales compared to the competition last year?

It didn’t get out of hand, some ended up worse. Last year, Škoda broke the plan to screw sales still up to 1.8 million cars. It struggles with everything other car manufacturers do.

How do you explain that while the Octavia remained the best-selling model, the Fabia fell by almost half?

The reason is that the Fabia will start in the fourth generation, the biggest novelty of this year.

Production of the Karoq model is moving from Bratislava back to Mladá Boleslav. Will more frequent relocation of model production from factory to factory be an accompanying phenomenon in the coming months, or is this an isolated case?

Surely that could be the case. For example, the Škoda unions have made it known that the production of Karoq in Bratislava costs fifty thousand crowns more than in the Czech Republic. It used to make sense, they had full capacity. Now, similar removals can happen more often so that money is not wasted.

Is Škoda, together with others, coming under pressure from the Group after this year’s results?

I do not think so. Rather, automakers will struggle with disrupted supply chains. That will be the biggest problem. Not that they can’t produce, but they won’t have the parts. And that will be bad. The first half of the year will be a crisis. But I believe it will settle around August and September.

It buys most of its damage from domestic suppliers. The coronary crisis has taught automakers, and not only that, it’s not good to rely on suppliers from one area. It’s not just the virus that is to blame, the key factory supplying the boxes or windows may be flooded and the production of the whole car stopped. It has been shown that the system is prone to similar blows.

Negotiations on wages begin at Volkswagen, which also awaits Škoda and its trade unionists. Do you expect the same generous increase in wages and various bonuses as in previous years, or will it change due to the financial losses associated with the pandemic combined with high investments in electromobility?

The unions in Škoda are perhaps the strongest in the country. In this sense, I am not worried about them, others could learn from them. I believe that despite the financially demanding time, Škoda will not have a problem with that. But I can be wrong.

The new head of Škoda, Thomas Schäfer, is far from in an easy situation, what do you think he will focus on?

Definitely to increase supply chain reliability. And then certainly to fight emissions so that Škoda complies with the limits and does not pay fines. This year she did not avoid the fine, but more or less it was planned. If they wanted, they could continue to produce the Citigo electric model and have better numbers in terms of emissions. At the end of the summer, however, they stopped production earlier than they originally wanted. Because they had enough of those cars.

How do you read the task that Schäfer was given by the concern to make Škoda focus more on cheaper cars?

It’s a shame to bet a lot on smaller SUVs and on the Scala or Fabia. The crisis has shown that consumers will return to cheaper cars. That’s why, for example, the Fabia will be in the combi version. I think companies will buy managers smaller cars in the fleets, scala instead of octavia.

For cheaper cars, Škoda may meet higher demand…

Definitely, especially for companies. The crisis will increase interest in cheaper cars, which Škoda should focus on, which is precisely the assignment from the concern.

Will the pressure to increase sales increase this year? Last year, no one could have expected a pandemic, but now obstacles must be reckoned with in advance.

I think they look at it sensibly in the concern. For example, last year’s Škoda sales in the Czech Republic did not turn out so badly again. They fell by almost twelve percent to 83,200 cars. However, we have been able to observe too high expectations across the market in recent years. Many press releases for last year’s sales are now published. Many automakers, most recently Seat, begin the message by praising the work and commitment of employees for managing the crisis.

The sales numbers that the carmakers wanted to drive to the skies mention “in parentheses”, as if they weren’t even about them last year. Everyone wanted to increase sales by five percent every year, but that doesn’t go on indefinitely. Somewhere the sale had to stop. Stagnation is not a bad word. Maybe Škoda will reconsider its previous plans to sell 1.8 million cars and say that it is not necessary. And you can always say that you care more about quality than quantity.