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Skoda: Discreet and realistic into the future

While Cupra is making a loud noise and VW is positioning the ID. series alongside combustion engines, the Czechs are planning their future more quietly, but no less efficiently.

New logo, new products: The Škoda committee at the presentation of the figures and the future. | Photo: Škoda Auto
New logo, new products: The Škoda committee at the presentation of the figures and the future. | Photo: Škoda Auto
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Gregor Soller

After the new Fabia, it became somewhat quiet in terms of products at Škoda: Although they showcased the five-meter-long 7S concept along with the new logo, indicating the direction they are headed, they will first continue with combustion engines. But first things first: In 2022, despite the challenging market environment, they managed to deliver more than 730,000 vehicles. This was all the more challenging as the Czechs have a strong presence in Eastern Europe and suffered more from the Ukraine conflict than other brands within the group.

New logo, new look: Three electric vehicles scheduled by 2026

Nevertheless, they continued to develop their business as planned. In May 2022, they started production of MEB battery systems, and by 2026, three more electric vehicles are expected to be launched – all in the new brand design with the new logo. Škoda Auto CEO Klaus Zellmer summarized:

"Škoda Auto proved its resilience in 2022. Despite numerous challenges for our industry, we sharpened our strategic focus: We introduced a new design language and brand appearance, started manufacturing MEB battery systems, and accelerated our e-mobility offensive."

SUV yes, but: The Octavia remained the top seller in 2022 by far

In 2022, the Škoda Octavia remained the brand's bestseller with 141,100 units delivered. Demand for SUV models Kamiq (96,300 units) and Kodiaq (94,500) also remained consistently high, followed by the Fabia (92,700), ensuring the remaining lineup rests on equally strong pillars. The Enyaq iV reached around 53,700 units with the introduction of the Coupé RS iV. The Scala, Škoda’s actual Golf competitor, lagged somewhat behind, selling 39,500 units and could be phased out in the future.

More MEB batteries for the entire Volkswagen Group

In component manufacturing, Škoda took an important step last year to establish the Czech Republic as an e-mobility hub: In May 2022, production of battery systems for fully electric vehicles started at the main plant in Mladá Boleslav. According to company information, investments in the newly established production line amount to around 130 million euros. Another assembly line will be added in 2023, increasing total capacity to 1,500 batteries per day. The MEB battery systems produced in Mladá Boleslav are used in models from Škoda, Volkswagen, Audi, and Seat. To put this into perspective: Tesla plans to build up to 1,000 Model Y cars per day in Grünheide alone. Mladá Boleslav remains the only group location outside Germany in Europe where battery systems for MEB vehicles are produced.

Ukraine war hit Enyaq assembly hard – but Škoda responded immediately

Flexibility has never been lost in Eastern Europe: The Ukraine war massively impacted Enyaq production assembly, so Škoda took an unusual measure: After production of the fully electric Enyaq iV had to be suspended for eight weeks in the first half of 2022 due to ongoing supply shortages, they moved part of their Ukrainian component production to the main plant in Mladá Boleslav in cooperation with their suppliers! Within a few weeks, production capacities in Europe and North Africa were doubled, allowing at least part of the high backlog of orders to be processed quickly.

Škoda is also planning international expansion: From India to Southeast Asia

While Cupra looks to Australia and now also the USA, the Czechs are planning their expansion under their "Next Level Strategy" with new market entries and additional locations more towards India and Southeast Asia. This is to advance their internationalization strategy and unlock potentials for the Volkswagen Group in promising growth markets. This strategy seems to be taking hold in the key market of India: Škoda claims it more than doubled its deliveries there in 2022 (+127.7 percent compared to the previous year – which is relative, as the top seller was the compact SUV Kushaq with 26,800 units, followed by Slavia with 20,900 and Rapid with 17,300 units). They are also on the verge of entering the dynamic growth market of Vietnam and additionally bear the strategic responsibility for the Volume Brand Group in the ASEAN region. These foundations provide access to the Indo-Pacific region, which remains the fastest growing economic region worldwide (+8 percent per year). The market volume there could exceed 4.1 million vehicles by 2030 – with China also having this region in sight, Škoda aims to counter here.

Growth is also planned in the Middle East

Due to its geographical proximity to India, significant synergies are expected. These also play an essential role for engagement in the Middle East: Annual deliveries are expected to rise to around 5000 units in the next three years. As of February 1, 2023, Škoda has joined Audi Volkswagen Middle East (AVME) to integrate the brand into the existing National Sales Company for the Audi and Volkswagen brands.

Next Level also means: More sustainable

However, "Next Level" also means a hub in terms of sustainability: This issue is approached holistically and throughout the entire value chain. For sustainable production, Škoda increasingly relies on recyclable materials in its models. Additionally, they are committed to recycling high-voltage batteries from their electric vehicles and aim to operate the three plants in the Czech Republic climate-neutrally by the end of the decade. Overall, the share of renewable energy at their Czech sites was around 35 percent in 2022. In fact, Škoda recently commissioned one of the largest solar power plants in India at its Pune plant, which is expected to cover up to 30 percent of the plant's energy consumption.

The fleet emissions are to be halved from 2020 to 2030

Škoda does not proclaim a major shift to e-mobility within its fleet: Instead, the emissions of sold vehicles are to be reduced by more than 50 percent by 2030 compared to 2020, with the combustion engine remaining an important part of the fleet. Therefore, they are consistently optimizing the combustion engines further: The new generation of the Superb and Kodiaq model series will also come with plug-in hybrid drive – by the end of 2023, early 2024.

Three new models by 2026 and investments of 6.3 billion euros

Škoda Auto expects the overall situation for the automotive industry to remain challenging in 2023, but sales are running well. The revised Enyaq iV is expected to already feature the "Modern Solid Design," along with the new brand appearance "Explore More" including a new design language, a new logo, and the most comprehensive change in corporate identity in the last 30 years. They are moving away from the strong image of the "flying arrow" and instead putting the logo text in the foreground – similar to many Chinese brands. The electric models are planned to include a small car analogous to the VW ID.2, to be built in Spain, a compact model, and a large vehicle like the 7S, dividing the Enyaq into two rows in the future. More concrete insights are expected to follow in the second quarter of 2023.

 

 

Aussagen in diesem Video müssen nicht mit der Meinung der Redaktion übereinstimmen.

The goal is to cover the entire electric product range – from the affordable entry-level model to the spacious family vehicle. The BEV share of deliveries in Europe is expected to increase to over 70 percent by 2030. To achieve these goals, the automaker will invest a total of 5.6 billion euros in electromobility and an additional 700 million euros in digitalization by 2027.

What does this mean?

Within the VW Group, Škoda tends to plan in a more down-to-earth, discreet, but very understandable manner: The Czechs are slowly saying goodbye to the combustion engine and are not launching a flurry of new models, but rather shifting some products and carefully developing the top sellers further. The biggest headwind the brand is likely to face will come from China, as Chinese brands with similarly designed and priced products target the same customers.

Translated automatically from German.
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