Cars

Skoda sees sales skyrocket sevenfold

By Han Tianyang (China Daily)
Updated: 2011-01-10 13:52

Skoda's lineup in China. Provided to China Daily

China now the cornerstone in comeback by Czech brand

BEIJING - Sales of Volkswagen Group's Czech brand Skoda surpassed 200,000 cars in China last year, a 62 percent surge over 2009 and a sevenfold increase over the 27,000 cars it sold in 2007, the first year it made cars in the nation.

At first a little-known brand on the Chinese market, Skoda has now delivered 410,000 cars over three and a half years and is among the most successful brands made at a Sino-foreign joint venture.

Products that suit the local market have been crucial to Skoda's success, according to the local automotive press.

Starting with compact

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From 2007 to 2009, Skoda brought out its compact Octavia, subcompact Fabia and mid-sized model Superb in succession through local production at Shanghai Volkswagen Automotive Co Ltd, the joint venture between Shanghai Automotive Industry Corp and German parent company Volkswagen.

Designed, produced and marketed for the mass compact market, the Octavia has had stable monthly sales surpassing 10,000 units.

Last year the joint venture updated its entire Skoda portfolio to increase competitiveness.

It introduced the energy-saving and environmentally friendly New Octavia Greenline and the high-performance version New Octavia RS, as well as the enhanced New Octavia equipped with the powerful TSI engine and DSG transmission.

New Fabia

It also launched new Fabia versions for 2011 and a new Superb model with 1.4-liter TSI engine.

Many of Skoda's models are eligible for Chinese government's subsidy for small-displacement cars with engines of 1.6 liters and below, which also improved its competitive edge.

The company announced early in December that it will produce its compact SUV Yeti in China in 2013 to tap the booming segment.

It said the move will further enhance the volume, image and brand awareness of Skoda.

The brand now has a sales and service network of more than 300 dealers in China, which it plans to greatly expand in the next five years, especially in the second and third tier cities. A total of 600 outlets across China are envisioned by 2015.

Service awards

Despite fast expansion, the company has won China Auto Service Golden Wrench Awards for four consecutive years.

According to statistics provided by Shanghai Volkswagen, consumer awareness of the Skoda brand increased to 31 percent in 2010 from 9 percent in 2008.

Word of mouth

Surveys said more than 20 percent of its customers made the decision to buy through word-of-mouth recommendations by the existing owners.

Shanghai Volkswagen passed its own milestone last year with output and sales both surpassing 1 million vehicles, 20 percent of which were Skoda cars.

The company said it forecasts the proportion will increase to 30 percent.

Winfried Vahland, board chairman of Skoda, said in a previous interview with China Daily that China and Shanghai Volkswagen are the cornerstone in the future strategy for Skoda as the century-old brand maps out its revival worldwide.

The company plans to double annual sales worldwide to more than 1.5 million units in the next decade with a substantial proportion in emerging markets like China, Russia and India.

In the next 10 years, about 50 percent of Skoda's global sales will come from markets outside Europe, according to the company's estimates.