AutoBeta(AutoBeta.net)05/05 Report--

The Skoda brand of Volkswagen Group reported that sales revenue in the first quarter of 2020 was 4.85 billion euros, down 1.4 percent from 4.92 billion euros in the same period last year, and operating profit was 307 million yuan, down 25.1 percent from 410 million yuan in the same period last year. However, compared with the same period in 2019, it is clear that Skoda's overall business has been seriously affected by the current economic situation and necessary measures. Skoda chief executive Mayboner said the shutdown meant a loss of production capacity for 100000 vehicles and that global car sales in the coming months remained unpredictable, but the company was ready.

Skoda is the largest exporter in the Czech Republic, and the Chinese market is its largest single market. In terms of delivery, Skoda sold 232900 vehicles worldwide in the first quarter, down 24.3 per cent from 307600 in 2019. Skoda delivered 29000 vehicles in the Chinese market, down 54.9 per cent from 64000 in the same period last year.

Skoda has suffered the biggest decline in the Chinese market. For Skoda, the situation encountered in the Chinese market at this stage is even more serious. Although sales fell by more than 50% in the first quarter due to the depressed car market and the epidemic, even without the interference of the epidemic, Skoda's performance in China is also shrinking. As a brand under Volkswagen Group, Skoda's performance in the Chinese market is far less lucky than Volkswagen brands. although it is a sub-brand of SAIC-Volkswagen, it has a better performance-to-price ratio even though it has many similarities with Volkswagen models in products. however, the shortcomings of the brand and the disadvantages of competitiveness have become obstacles to its development.

At present, China's auto market is still in a state of decline, and the intensification of market competition has forced Skoda brands to adjust their positioning. Last month, Skoda officially lowered the guidance price of all its models, with the latest suggested retail price range of 77900 yuan to 247900 yuan, with a maximum drop of 24500 yuan. It remains to be tested whether the price cut will be good for Skoda brand sales growth, but Skoda brand has also been labeled as a "cheap version" of Volkswagen.

Skoda's cumulative global sales fell 1 per cent year-on-year to 1.2 million vehicles in 2019, with cumulative sales in China falling 17 per cent to 282000 vehicles. Skoda seems to have become a burden for SAIC Volkswagen. How to boost Skoda brand sales is urgent. Volkswagen intends to develop a new plan to revive Skoda brand's flagging sales in China.

This is already true of the Chinese market as the largest single market, and while the global epidemic is still spreading, the impact of the epidemic on Skoda is unpredictable. Skoda's sales in western Europe fell 22.6 per cent to 106700 in the first quarter of this year, with Germany falling 25.4 per cent to 35800 and Norway up 25.4 per cent to 1700. Sales in the central European market fell 10.2 per cent to 46900 from January to March, including 3.3 per cent to 21300 in the Czech Republic and 13.3 per cent to 1500 in Croatia. In addition, sales in the Eastern European market fell 21.2% to 8700 vehicles in the first three months, while the Russian market grew 13.9% to 21000 vehicles, the Indian market fell 21.2% to 3100 vehicles, and the Turkish market grew 60.5% to 3800 vehicles.

Klaus-Ditte Schumann, a member of Skoda Finance and IT Board of Directors, said that the sharp decline in sales, revenue and exchange rate have affected the company's earnings, in the current situation, Skoda will take comprehensive measures to effectively reduce costs and expenses in the short term. With regard to the further impact and risks of the outbreak on the company, the greatest impact of the current crisis is expected to occur in the second quarter, followed by a gradual recovery in the third quarter and may return to the previous year's level in the fourth quarter.

On April 27th, three Skoda plants in the Czech Republic resumed production at a slower rate. Looking at the world, with the exception of the Chinese market, the resumption of work and production in other overseas automobile markets is facing a lot of instability, and the overall impact is expected to be concentrated in the second and third quarters, on the basis of which there will be significant changes in annual sales and performance.

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