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According to German media reports, Volkswagen Group may consider repositioning Skoda brand, lowering its brand positioning to a low-cost line, and will compete with Korean and other low-end brands in the future.

Skoda CEO Mayboner said Skoda's brand value would not change in the future, but hoped to improve the strength of Volkswagen's brands by reducing competition from sister brand Seattle.

Skoda brand sold 330000 vehicles in China in 2016, the first time that Skoda's annual sales have exceeded 300000 in the decade since it entered the domestic market. In 2017, Skoda brand sales in China increased slightly compared with the same period last year, achieving sales of 333000 vehicles. In 2018, Skoda brand outperformed the market with an annual sales performance of 350000 vehicles.

In 2019, in the grim environment of China's auto market, Volkswagen's models do not have much impact on sales by virtue of their domestic strength, while Volkswagen Skoda brand is not so easy. Skoda sold 25300 vehicles in China in September, down 17.2 per cent from a year earlier. Skoda sold 194500 vehicles in China in the first three quarters of this year, down 22.3% from the same period last year.

Or Volkswagen brand is considering lowering its product positioning based on the poor performance of Skoda brand in the domestic market in recent years. In fact, in early October, there were media reports that Volkswagen Group would downgrade Skoda's brand positioning and give up some high-end configurations to improve the performance-to-price ratio, so as to improve the performance-to-price ratio, which would then compete with Korean brands to gain a higher entry-level car market share.

In recent years, Skoda has accumulated some influence in China, and it has always been the profit engine of Volkswagen Group, and its profit margin has always been higher than that of Volkswagen brands, mainly because Skoda is manufactured in the Czech Republic and the cost is relatively low. and the use of Volkswagen modular platform research and development technology.

Skoda's success in profit has undoubtedly been dissatisfied with some brands of Volkswagen. According to German media reports, Bernd Ostro, a member of the supervisory board of Volkswagen Group, once opposed Skoda's continuous acquisition of the latest technology from Volkswagen.

In view of Skoda's current performance in China, if Volkswagen can put down its posture and downgrade the market positioning of Skoda brand, it may provide Skoda with a new path. At present, the sales of Korean brands in China are also difficult to be optimistic. On the one hand, word-of-mouth has declined, and most of its models are traded for quantity with price. On the other hand, the strength of Korean brand products is relatively low. If Skoda moves to the low end of the market, it is bound to make Korean brands face greater market pressure.

At present, the Chinese market is the market that Skoda brand urgently needs to improve.

Skoda said that Skoda has launched a 2025 strategic layout to increase investment in new energy vehicles and intelligent networking, and will launch at least three pure electric models in the future to enrich Skoda's product spectrum. At the same time, Skoda will launch KAMIQ GT in the Chinese market in November, when the new products will drive the growth of sales in the Chinese market. "

Some people in the industry said that Skoda can no longer obtain sales by subdividing models and price advantages. Because the brand is weak, Skoda has been greatly impacted in the unfavorable market environment. Once the weakness of such a brand in China is formed, it is difficult to turn around, and it is difficult for Chinese consumers to change their inherent impression of Skoda.

If Skoda brand succeeds downward, then Volkswagen's brand "high, middle and low end" brand camp will be more perfect, which is undoubtedly a good growth point for Skoda brand and Volkswagen.

Industry insiders pointed out that Volkswagen has decided to build a new factory for the next generation of Skoda Express and Volkswagen Passat, which is now tentatively located in Turkey, which proves the group's confidence in Skoda brand.

It is worth noting that Volkswagen just launched the Jetta brand not long ago, which is also aimed at the low end of the market. Jetta sold 11080 new cars in its first month on the market, exceeding its target of 130%. Specifically, Jetta belongs to FAW-Volkswagen, while Skoda belongs to SAIC-Volkswagen. Skoda is also close to Jetta in the Chinese market, and there is a competitive relationship between them. However, it is not clear whether Volkswagen Group's brand strategy adjustment will affect the Chinese market.

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