Paris show: Skoda to stay lean

SKODA will maintain a lean and sustainable model line-up as it continues its move away from budget brand status and pushes for a bigger slice of its European home market.

The Volkswagen Group-owned car-maker has been slowly shifting more upmarket in an effort to appeal to a broader buyer base, and while Europe is unsurprisingly the brand’s biggest market, it has also made inroads into China.

Skoda’s global sales have lifted from 661,475 in 2007 to 772,819 in 2010, before reaching a record 944,432 units in 2012.

Last year, the Czech brand’s sales slipped 12,463 units to 931,969, which it blamed on the staggered introduction of the new-generation Octavia mid-sizer, as well as slower sales of the Fabia in the final year of its model life cycle and reduced interest in the ageing Superb sedan.

Skoda CEO Winfried Vahland told reporters at the Paris motor show the Czech brand had a clear objective to grow sales, particularly in Europe which remains sluggish, despite a moderate turnaround.

“We want to grow in this decade up to 1.5 million cars worldwide,” he said. “We are the fastest growing volume brand in Europe.

“That makes us confident even in the European economy which is, let’s not say struggling, but not really growing. We are growing fast in market share here in Europe and in other markets.” Professor Vahland likened Skoda’s trajectory to a sporting league when discussing whether the company was likely to expand into new markets.

“We are now in first league, but we are coming from a 120-year old history, it was always in the Skoda genes to grow step-by-step.

“We have a model range expansion and we introduced about eight new models and derivatives last year. And this, the organisation, the dealerships, the customers, they have to digest it.”

Skoda’s global model line-up consists of seven models, including the recently launched Rapid small car, Citigo micro car, Yeti SUV and the aforementioned Fabia, Octavia and Superb.

Professor Vahland said despite Skoda’s healthy financial state any future additions to the line-up would need to stack up to a strong business case.

“From this point of view we are a small brand. We have to invest everything, we have to finance everything, we have to earn our own money. We are debt free.

“We have an equity of 60 per cent therefore we are very financially healthy and we want that to continue. That’s why we will only invest where we have a certain volume chance.

There is also one segment the Czech brand won’t be entering any time soon – convertibles. Professor Vahland said there are very few markets where a Skoda cabriolet would sell.

“Therefore, you will never ever see a cabriolet as long as I am the chairman of this brand. It does not make sense,” he said.

Discussing recent reports suggesting that the Volkswagen Group will sign off on a new budget brand to take on the Renault-Nissan Alliance’s hugely successful Dacia brand in the next 12 months, Professor Vahland said it would not affect Skoda as it is not, and has never been, a cheap brand.

“When I came to Skoda in 2010, there was always a discussion about Skoda and Dacia and so on. First of all I can’t even build cheap cars, it’s not my personality.

“Cheap cars do not fit into Skoda history. We have a rich history of eight-cylinder and six-cylinder cars driven by presidents, kings and warriors.

You will see this is not a cheap brand, there is a huge history.

“We have to make affordable cars for everybody, and that is something we will strive for and what we are working for. But never, ever cheap cars. But Volkswagen as a group, not a brand, is deciding to make a budget car, it is only for certain markets.”

Despite all Skoda models sharing underpinnings with fellow Group brands, Volkswagen and Spanish-based Seat, Professor Vahland said there is no confusion between the brands as each offers something different for buyers.

“You always try to find something, but the brands are so well distinguished.

You know what Skoda stands for: it is roominess, functionality, price value and we mix it with good, sporty design.

“Seat stands for sportiness, emotions and Spanish islands. Volkswagen is Volkswagen. You don’t have to discuss it. It’s pretty well distinguished. All brands are growing.”