AutoBeta(AutoBeta.net)01/25 Report--

According to the latest figures released on Volkswagen Group's Skoda Automotive website, the Skoda brand sold 731300 vehicles worldwide in 2022, down 16.73% from a year earlier. Skoda said Skoda and the automotive industry had faced many challenges over the past year, including persistent semiconductor shortages, the conflict between Russia and Ukraine, supply chain problems, and rising energy and raw material prices.

This is the fourth year in a row that Skoda's sales have declined. Skoda reached an all-time high in 2018, with sales of 1.2537 million vehicles for the whole year, and then continued to decline. Skoda's global car sales were 1.2428 million, 1.0048 million and 878200 respectively from 2019 to 2021, with only 731300 left by 2022.

In terms of specific models, the Ming Rui is Skoda's best-selling product, with a total sales of 141100 vehicles in 2022 (down 29.73% from the same period last year), the only model with more than 100000 vehicles sold. In addition, Klock, Komick and Jingrui sold 96300 vehicles (down 20.22% year-on-year), 94500 vehicles (down 20.64% year-on-year) and 92700 vehicles (down 6.46% year-on-year).

Regionally, Skoda's sales declined to varying degrees in all regions except India in 2022. Among them, Skoda's sales in Western Europe fell 7.8 per cent to 377000 vehicles compared with the same period last year. Germany is the world's largest single market, with annual sales falling 1.8 per cent to 134300 vehicles; Central Europe's annual sales fell 9.8 per cent to 148000 vehicles. Among them, the domestic market Czech fell 11.0% to 71200 vehicles. Sales in eastern Europe, excluding Russia, fell 11.9 per cent year-on-year to 31600 vehicles, while the Russian market plunged 79.8 per cent from a year earlier.

At present, India is regarded by Skoda as the most potential market. Skoda's sales in India increased by 127.7% to 51900 vehicles in 2022 compared with the same period last year, surpassing the Chinese market, second only to Germany and the Czech Republic. In sharp contrast, Skoda plummeted again in the Chinese market, with annual sales of only 44600 vehicles, down 37.4% from a year earlier, second only to Russia.

According to the data, Skoda, founded in 1895 and headquartered in Mrada-Boleslav, Czech Republic, is one of the four oldest automobile manufacturers in the world. Skoda started from the production of bicycles, and then expanded to motorcycles and cars. In 1991, the German Volkswagen Group acquired 70% of Skoda, which became a subsidiary of the Volkswagen Group, and the remaining 30% was acquired in 2000, making Skoda the fourth largest brand of Volkswagen after Volkswagen, Audi and Seattle.

In April 2005, Skoda reached a cooperation with Shanghai Volkswagen, Skoda officially entered the Chinese market and opened the road for Skoda to be made in China. In September 2006, the brand KODA was officially launched, announcing its Chinese name "Skoda" and becoming the second brand under SAIC-Volkswagen. In the early days of entering the market, Skoda has been quickly favored by Chinese consumers by virtue of its century-old brand and the halo of popular technology. In June 2007, Skoda China's first strategic model Octavia Ming Rui launched, with sales of 31800 vehicles in half a year. In December 2008, SAIC Skoda's second model, Fabia Jingrui, was officially launched. In August 2009, SAIC Skoda's second model, the Superb Hao Rui (renamed Express School after its replacement in June 2013), was officially launched. In the following three years, Skoda slowed down, relying on the outstanding performance of the leading model Octavia in the market, successively launched the bright green GreenLine focusing on energy saving and environmental protection, and the new bright sharp RS, a high-performance sedan car, to stabilize and continue to expand the position of Octavia bright in the A-class car market.

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. After entering 2010, Skoda accelerated its product layout, growing rapidly from three to six, bringing significant sales growth to Skoda. It can be said that the decade from 2005 to 2016 was Skoda's best time in the Chinese market.

In 2010, Skoda delivered more than 200000 vehicles in China for the first time. China has become Skoda's most important market in the world, and this position continues until 2019. After 2012, Skoda successively launched the A-class entry model Rapid Xin Rui, the first SUV Yedi, the travel car Rapid Spaceback Xin, and carried out the imported car business in the Chinese market.

An active market and a wealth of models have boosted Skoda's sales. 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 and successively launched medium-sized SUV Kodiak, Compact SUV Kroc, Urban SUV Cormick, sedan SUV Kodiak GT and other models, forming a complementary product lineup with other cars.

Skoda has indeed achieved certain results after its independence. Skoda sold more than 300000 vehicles in the Chinese market for three consecutive years from 2016 to 2018, which were 330000, 333000 and 341000 respectively. At this point, Skoda's glory in China has also reached its peak. But over the next few years, Skoda fell rapidly from its highs, to 282000, 173000 and 71200, respectively, from 2019 to 2022, with only 38000 left in the first 10 months of this year. Although Skoda has made various attempts to change the decline in sales during this period, such as promoting more localization of models and lower prices, all to no avail.

Since the Chinese automobile market entered the stock competition in 2018, the second and third-tier joint venture brands began to decline collectively. Besides Skoda, Suzuki, Mitsubishi, Mazda, Acura, Hyundai, Kia, Renault, DS, Peugeot, Citroen and so on. The "defeat" of these brands in the Chinese market has something in common, one of which is that the dividend of the seller's market in the Chinese car market is no longer available, and the market competition is unprecedentedly fierce. Second, the rapid rise of independent brands has squeezed the market share of joint venture brands, and weak joint venture brands are losing ground. In addition, with the advent of the electric era, joint venture brands are generally ill-prepared and at a disadvantage in the competition.

As for Skoda, there are more detailed reasons for its shrinking market. Within SAIC-Volkswagen, the positioning of SAIC Skoda is slightly lower than that of SAIC-Volkswagen, but the two remain on the same platform, and the product functions are not much different. With the complication of market competition, the price of Volkswagen brand goes down and the price of independent brand goes up, the living space left to Skoda under the double attack is becoming more and more narrow.

In the Chinese market, Skoda is also "defeated again and again", and its living space continues to shrink. At the end of 2022, Skoda general manager Klaus Zelmer (Klaus Zellmer) said in an interview with Automobilwoche: the current competition in China is too fierce, we will work with Chinese joint venture partners to consider how we will proceed. 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 the news, Skoda China said that as part of the company's normal commercial operation, Skoda will continue to evaluate its position in the international auto market and adjust its strategy to adapt to the development of the local auto market. This naturally includes the Chinese market.

From the perspective of Volkswagen Group, Volkswagen Group continues to evaluate the performance and strategies of various brands in all global markets, including Skoda's future development in China, Volkswagen China CEO Baird said on January 11. Such an assessment is still under way and no final decision has yet been made.

So, will Skoda withdraw from the Chinese market? At present, there is no clear answer, but today's Skoda is like a hot potato for SAIC Volkswagen, and it is possible to survive with a broken arm. In addition, India overtook China to become the third largest single market in the world. Skoda, by contrast, prefers to see India as a promising market.

At the 20th Guangzhou Auto Show held on December 30, 2022, Volkswagen Group, including Volkswagen imported cars, FAW-Volkswagen and SAIC-Volkswagen, all appeared one by one, while SAIC Volkswagen Skoda was absent from the feast. This also gives Skoda a little more room to imagine the rumors that Skoda will withdraw from the Chinese market.

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