Skoda may exit China to help VW

Skoda It could pull out of China amid fierce competition from local brands in the world’s largest market.

Skoda CEO Klaus Selmer said: “We will consider together with our joint venture partners in China how we want to continue there.” car news europe sister publication car week.

Skoda’s withdrawal from China will allow parent company Volkswagen Group to focus its domestic efforts on its main VW brand, which is struggling to compete domestically.

Instead of pulling out of China entirely, Skoda could consider selling only imported cars. Skoda’s Chinese models are now built at the VW Group’s joint venture plant. “If you want to focus your efforts, it’s worth watching the scenario and then making a decision,” Zelmer said.

Chinese automakers, many of which are state-owned, have long operated in the shadow of international companies such as General Motors, Volkswagen and Mercedes-Benz, even when they partner through joint ventures.

However, the Chinese government’s efforts to lead in electric vehicle technology have allowed many long-standing companies, notably BYD and Geely, to emerge as leaders as the EV era unfolds. Chinese EV startups such as Nio, Xpeng and Li Auto are also gaining traction and scale, threatening smaller foreign brands.

Skoda held 0.6% of the Chinese market in 2021. The brand’s Chinese deliveries fell 31% to 36,300 units in his first three quarters, according to the company’s financial report. Skoda’s worldwide shipments during the same period fell by 22% to 544,500 units.

Withdrawing from China will allow us to focus more on India, where we have responsibilities within the VW Group.

Skoda also plans to start selling and manufacturing cars in Vietnam in October, saying the country has “considerable growth potential”.

The brand sees potential annual sales of up to 40,000 cars in Vietnam, including cars built from fully knocked-down kits at a local factory scheduled to open in 2024.

Skoda is also responsible for the VW Group’s Russian business, which stalled after Russia’s invasion of Ukraine.

ⅤIn a statement to Reuters, W Group said it is normal business procedure for Skoda to continuously monitor its international market position and adapt to local developments.

“To date, no decisions have been made regarding possible changes in strategy,” the company said.