Skoda may exit China to help VW

Skoda may exit China amid stiff 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 exit 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.

Skoda’s Chinese market share in 2021 was 0.6%. Skoda’s sales in China fell 31% to 36,300 units in his first three quarters, according to financial reports. Worldwide shipments during the same period were down 22% to 544,500 units.

Scenery of India and Vietnam

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.

russian hit

Skoda is also in charge of the stagnant VW Group’s Russian business. After the February invasion of Ukraine, the group suspended production and sales in Russia.

This is putting pressure on Skoda’s earnings.

“The integration of Volkswagen Group Rus into the financial results naturally presents special challenges for Skoda,” said Zellmer, “which will have a negative mid-triple-digit impact on full-year operating results.” said.

How things will continue in the country is an open question, he said. “The future of the Russian market is uncertain.”

ⅤW Group said in a statement to Reuters that it is normal business procedure for Skoda to continuously monitor its position in international markets and adapt it to local developments. No decision has been made regarding possible changes to the ,” the company said.