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Skoda, a subsidiary of the German Volkswagen Group, is considering withdrawing from China and will make a final decision next year, according to German Automobile Weekly Automobilwoche and several domestic media reports. 'The current competition in China is so fierce that we will consider how we will proceed with our partners in Chinese joint ventures, 'General Manager Klaus Zelmer (Klaus Zellmer) said in an interview with Automobilwoche. If we want to focus, it's worth looking at all the scenes and then making a decision. In addition, Klaus Zelmer points out that consideration could be given to selling cars only in China, rather than producing them.

In response to relevant reports and comments, Skoda China officials responded that as part of the company's normal business operations, Skoda continues to evaluate its position in the international market and adjust its strategy to adapt to the development of the local market. this also includes the Chinese market. To this end, the company has maintained a continuous and constructive dialogue and exchange with our joint venture partner SAIC-Volkswagen in China to examine how to achieve the best positioning of Skoda brand in the Chinese market in the context of China's transition to fully networked electric travel. At present, the company has not made any decision on the need to adjust its strategy.

Skoda is one of the brands of the German Volkswagen Group, headquartered in Mlada-Boleslav, Czech Republic, is one of the four oldest automakers in the world. In April 2005, Mr. KODA AUTO partnered with Shanghai Volkswagen Automobile Co., Ltd. to open the way for Skoda to make its own cars. In September 2006, the automobile KODA brand was officially launched, announcing its Chinese name "Skoda" and becoming the second brand under SAIC-Volkswagen. In June 2007, SAIC Skoda's first strategic model, Octavia Mingrui, was officially launched. In December 2008, SAIC Skoda's second model, Fabia Jingrui, was officially launched. In August 2009, SAIC Skoda's second model, Superb Speedway, was officially launched.

Like other joint venture brands that are new to China, Skoda had a golden age. Since Skoda entered China, it has been endorsed by "German quality". The label "Shanghai Volkswagen Skoda" has become a symbol of Skoda's status in the Chinese market, even though it is a Czech car brand acquired by Volkswagen Group. Especially after entering 2010, Skoda accelerated its product layout, growing rapidly from three to six, bringing significant sales growth to Kodak. Skoda had 1.8% of the market share in China as of 2016. It can be said that the decade from 2005 to 2016 was Skoda's best time in the Chinese market.

In order to gain more voice, Skoda bought a stake in SAIC Volkswagen. In July 2016, the tail mark of Skoda domestic model changed from "SAIC Volkswagen" to "SAIC Skoda", in order to strengthen the uniqueness of Skoda brand. Skoda began to change its product development strategy after the change of the standard, and no longer take the ratio of performance to price as the publicity point. In 2017, SAIC Skoda launched the SUV strategy. In April 2017, the first medium-sized SUV Kodiak was officially launched. In November 2017, the new compact SUV Klock was officially launched. In June 2018, the new compact SUV Cormick officially launched, selling for 10.99-130900 yuan.

2019 will be a turning point for Skoda's fate in China. With the introduction of more and more domestic products by Volkswagen and the rapid rise of Chinese independent brands, Skoda's sales are gradually declining. Skoda sold 333000 vehicles in China in 2017, up 0.8 per cent from the same period last year. At this time, Skoda's sales in China have shown signs of slowing down.

2019 will be a turning point for Skoda. Skoda's sales have plummeted since 2019, from 345000 in 2018 to 277000 in 2019, a far cry from the set annual sales target of 500000. This year, the classic Volkswagen model Jetta became independent and became a subsidiary brand of FAW-Volkswagen. Costas lost its price advantage, coupled with its unclear positioning, Skoda sales fell 17.3%.

The year 2020 marks the 125th anniversary of Skoda's birth, the 15th anniversary of Skoda's entry into the Chinese market, and the year of achieving 3 million sales in the Chinese market. After 2019, SAIC Skoda launched a "price war" in 2020. In April 2020, SAIC Skoda held an online press conference, and the sales of all its models for sale were reduced by up to 24500 yuan. At the same time, the manufacturer also provided a zero-interest credit and financial policy covering the whole range of models, as well as a stronger second-hand car replacement support program, which opened the prelude to the first wave of joint venture brand promotion in the post-epidemic period.

However, the effect of "price for quantity" is not significant. Skoda sold 151000 vehicles in 2020, down 45.5 per cent from a year earlier, according to data. In fact, the crux of Skoda can not be solved by price reduction. Skoda, which has its own "German halo", has not been really accepted by the market and domestic consumers since it entered the country, and the root is basically unstable. Coupled with the intensification of competition among brands within Volkswagen, Skoda's sales have not appeared a "highlight moment" after a brief sales rise.

Affected by the epidemic, many brands have no choice but to withdraw from the Chinese market in the first half of this year. On April 27th, the China Automobile Circulation Association released the Development report of China Automobile Circulation Industry 2021-2022. About 1400 4S sales and service networks will be withdrawn from the net in 2021, with joint venture brands accounting for 57%. Mainly Beijing Hyundai, Buick, Dongfeng Peugeot, Guangzhou Auto Fick, Skoda and so on, these joint venture brands have a low sense of presence in the market, or even inferior to independent brands. Earlier, Guangzhou Auto Honda and Guangzhou Automobile Acura jointly announced that the high-end brand Acura would officially withdraw from the Chinese market in 2023; the two major shareholders of Guangzhou Auto Fick have announced the termination of domestic production and its Jeep will become an imported brand; Beijing Baowo, known as "BBBA", has also declared bankruptcy.

2022 is destined to be another year of twists and turns for Skoda. According to the insurance figures, Shanghai Auto Skoda sold a total of 38022 vehicles from January to October 2022, down 61.32% from the same period last year. In terms of specific models, the Ming Rui is Skoda's best-selling product, with sales of 8593 vehicles in the first 10 months of 2022, down 54.81 per cent from a year earlier. Sales of Cormick and Xinrui were 8290 and 6504 respectively, down 62.67 per cent and 64.25 per cent respectively from a year earlier. In addition, Kodiak is 3866, speed dispatch is 2412, Klock is 5311.

In fact, the decline of German-Japanese joint venture brands has become a consensus. According to the latest data from the China Association of Automobile Manufacturers, from January to November 2022, the market share of Chinese brands reached a new high of 49.2%, while Germany and Japan fell, including 19.7% in Germany, 18.2% in Japan, 1.7% in the United States and 1.7% in South Korea.

For Skoda, its fuel models have no advantages in the Chinese market, while the planning of new energy vehicles lags behind, so it is not easy to turn the situation around. As for whether Skoda will withdraw from China, it is still uncertain.

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