Škoda expands its local plant

Škoda Auto marked its 20th anniversary of merging with Volkswagen (VW) by breaking ground on an expansion at the Mladá Boleslav plant April 15.

Since the merger April 16, 1991, Škoda has seen sales quadruple and has expanded into 100 markets, company executives said, while expanding its products to five different model series from the single product they offered in 1991.

"The merger was the decisive strategic turning point for the success and rebirth of Škoda during the last 20 years," said Škoda Chairman of the Board Winfried Vahland.

The expansion of the Mladá Boleslav plant will allow production capacity of the Škoda model Octavia to be increased from 800 to 1,200 units per day, and a new model will likely be introduced when the expansion is complete, around July 2012.

"Until the year 2018, we want to increase our sales to at least 1.5 million units per year. The significant expansion of the capacities in our parent plant at Mladá Boleslav is an important measure for the implementation of this growth strategy," Vahland said.

Škoda will continue to invest "massively in new products and new markets," a company release said, to increase its sales outside of Europe by more than half - particularly in China, India and Russia.

In 2010, Škoda sold more units internationally than ever before: 762,600 units, up 11.5 percent from 2009. From January to March of this year, Škoda sold 21.4 percent more units than in the same period last year, and March broke the record as the month with the most sales in the company's history, with 85,000 deliveries.

Domestically, Škoda has a market share of around 30 percent, and saw sales increase 9.2 percent on the year. Elsewhere in the region, sales grew 10.8 percent in Hungary, 22.1 percent in Slovenia and 54 percent in Ukraine.

One of the major drivers in international numbers has been sales in China, in which 54,400 automobiles were sold, an increase of 27.4 percent in the first quarter of this year compared with last year. China is expected to account for 20 million sold units per year by 2020, while overall unit sales are expected to reach 85 million per year.

"Few could have predicted just how well we would progress in China, a market we entered only four years ago," Vahland said.

VW was chosen as Škoda's Western partner in 1990 after the collapse of the communist regime. The deal was finalized in 1991, and by 1996, Škoda had sold 1 million vehicles while under VW. Škoda became the largest industrial company in the Czech Republic in 1998, and VW took 100 percent ownership in 2000.

Cat Contiguglia can be reached at
ccontiguglia@praguepost.com