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Although the lukewarm Skoda has a popular aura, its overall sales volume does not account for a large proportion of Volkswagen's China business. Unlike the Volkswagen brand, Skoda is a passenger car brand focused on the middle and low end of the market in China, with sales of 340000 vehicles in 2018, an increase of 4.9% over the same period last year. The Chinese market is still Skoda's largest single market in the world.

However, in 2019, China's new car sales continued to decline, market competition intensified, Skoda brand suffered a stall. Skoda fell 31% in may, following a 40% year-on-year drop in April.

Sales figures for May showed Skoda sold 21100 new cars in China, an improvement from a slump of 16600 in April, but down 31 per cent from 30660 in May 2018. Skoda's cumulative sales in China from January to May in 2019 were 102000, down 21% from a year earlier.

When the market enters the stock competition, Skoda also wants to open the failure mode? According to the China Automobile Association, sales in the domestic passenger car market fell by 15.2% in the first five months, while Skoda's market decline of 21% was clearly above average.

In fact, the popularity of Skoda brand in China is not poor, and Skoda car sales were good in the early years, but with the intensification of market competition, the product power has not been significantly improved, and the lack of initiative in localized product development has led to Skoda sales not going up all the time. Skoda's sales in China stagnated in the range of 320000 to 340000 vehicles in the three years from 2016 to 2018, and the increase in new products did not significantly boost sales, leading to anaemic growth.

Skoda CEO Bernhard Maier has previously said: "Skoda has adopted the SUV strategy to cope with the market downturn and will launch more models in the coming years, which is one of the strategies to resist the market downturn." Back to reality, Skoda's SUV strategy didn't work. At the Shanghai auto show in April, CEO Mayboner also said that "the past six months do not represent all of Skoda in the Chinese market. Skoda's growth rate will increase in the future."

Industry insiders believe that Skoda's market competitiveness advantage is not very obvious, and in the past few years, "localization" has not been included in the business strategy of the Chinese market, resulting in missing the golden period of development in the Chinese market. It was not until last year that three exclusive SUV of Komick, Kolok and Kodiak were launched, but the upsurge of the mainstream SUV market has long faded.

At present, SAIC Skoda is selling about 10 models, the product line is not long, but the mainstream subdivision models basically cover, can really form a large volume or hot-selling models do not have.

Often the big-character poster in Skoda 4S store reads, "those who know the masses have bought Skoda." However, consumers' habitual evaluation of Skoda brand is that it is not the life of the public, but it is the disease of the masses.

At this stage, Skoda is not only facing the dilemma of continuous decline in sales, but also declining consumer acceptance of Skoda brand and product power. The general market environment is depressed, Volkswagen brand sales are also declining, Skoda's decline is even worse, it is impossible to reverse the trend through new cars in a short period of time, price reduction and sales protection may be the only way out.

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