The Czech automobile manufacturer owned by the Volkswagen group has been reported to be exiting the Chinese market in the forthcoming period. According to reports, due to fierce competition in China, the largest auto market in the world, Skoda is presently considering leaving the country entirely. Such a move would enable Skoda to concentrate on other, more lucrative regions while assisting Volkswagen Group in enhancing the main Volkswagen brand’s presence in China.
While speaking to Automobilwoche, a print publication focusing on the German automotive industry, Klaus Zellmer, Skoda’s CEO, said,
The competition is very intense there, so we will consider, together with our Chinese joint venture partner, how we want to proceed. If we want to focus our energy, it’s worth checking all scenarios and then deciding.
However, the Skoda Chief did not mention any final dates or other important information regarding this news. So it remains to be unknown if this move will eventually happen or not. Reports state that China, which formerly represented more than 30% of Skoda’s worldwide sales and was the Czech automaker’s largest market, and in the recent few years has seen a significant decrease in sales. This number fell to 13% in 2021, and it is anticipated that it will go even lower in 2022. Skoda sales decreased by 22% globally and by 31% in China over the first three quarters of the year.
Skoda presently offers a number of vehicles designed specifically for the Chinese market, such as “GT”-branded versions of the Kodiaq and Kamiq as well as an Octavia with an extended wheelbase known as the Octavia Pro. They are all made in the joint venture factories in China operated by VW Group. So after the pulling the plug from China, it is believed that the funds may be diverted to other parts of the world if Skoda opts to leave or minimize its position in the Chinese market. The manufacturer is in charge of the VW Group’s activities in the emerging market of India, and it also has expansion plans for Vietnam.
In other Skoda news, a few months ago it was reported that the company is likely to launch its Enyaq iV electric crossover in India in 2023. The vehicle was spotted testing on Indian roads a few times. The Enyaq iV is built on the Born Electric platform which it also shares with the Audi Q4 e-Tron and Volkswagen ID4. Reportedly Škoda Auto’s premium mid-size sedan Octavia will also be getting electrified soon.
During a discussion with Autocar UK bakc in September of this year, Skoda CEO Klaus Zellmer said, “The Octavia is a fantastic car that we of course will have to keep in the family as long as we can as we have such a huge customer base.” He further stated that in preparation for a potential ban on ICE car sales in Europe in 2035, the company is actively looking into an electric version of the Octavia. By 2030, the automaker hopes to generate 70% of its revenues from EV sales.