Skoda's road to redemption: How a belittled Eastern European joke became a massive sales success

In a couple of decades, Skoda climbed from the bottom rung to 4th place on the list of Finland’s most popular cars

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By Jukka Perttu
     
      You've come a long way, baby.
      Between January and July 2011, the Czech Skoda was the fourth most-sold car in Finland, with a market share of more than 8%.
      This might not seem newsworthy, but at the beginning of the 1990s, the Skoda was still languishing at the bottom of sales statistics as an "east bloc" car to be sneered at, the butt of many cruel jokes, here and abroad.
      In 1992, the number of Skodas sold in Finland was just 184, while the market share of the make was a pitiful 0.27%.
      It was barely even on the board.
      However, the Czech brand had in fact seen much better days in these parts: through the 1950s to the 1980s, the number of Skoda cars sold in Finland was up to many thousands a year.
      They were, after all, seen (just as the Russian Ladas were) as "cheap and cheerful" vehicles for a while, until consumer tastes and spending-power moved up a gear.
     
The year of 1991 marked the beginning of a new lease of life for the Skoda marque, when the German Volkswagen Group bought a slice of the company, and western technology began to back the Czech car.
      Gradually the German car giant swallowed the entire Skoda Auto.
      Under German ownership, the Skoda brand has experienced constantly growing success, and with it burgeoning respect among the once-scornful public and the media test-drivers.
     
In 2010, a total of more than 760,000 Skoda cars were sold worldwide.
      Over the decade, the sales numbers roughly doubled, and the company’s present target is to increase the current sales volume by at least 100% by 2018.
      This doesn't look such a tall order when one considers that in January-July this year, the Czech car manufacturer increased its sales by a thumping 20% from the corresponding period last year.
      With its brands, the Volkswagen Group is determined to become the world’s largest car manufacturer.
      According to USA Today, only the US car maker General Motors was larger than Volkswagen at the beginning of the current year. The third position was held by Toyota (last year’s number one), which suffered a good deal damage arising out of Japan’s earthquake and tsunami.
      In addition to Skoda and VW itself, the group’s major brands are Audi and Seat.
     
Within the Volkswagen Group, all brands pool their resources in product development. For example, Skoda is in charge of developing a 1.2-litre petrol engine for the Group’s brands, reports Marketing Manager Jussi Kostiainen of Helkama Auto Oy.
      The company has been importing Skoda into Finland since 1947.
      Skoda models use the same engines, transmission, and chassis as the rest of the Group’s car marques. Moreover, for example the air conditioning switches on the dashboard are similar across all brands.
      Kostiainen notes that the big-selling Skoda Octavia, the Volkswagen Golf, and the Audi A3, as well as the Seat Altea and Leon, all have a similar chassis which can be adjusted as required.
     
Kostiainen notes further that Skoda tries to stand out from among the VW Group’s other brands by external look  and fittings. For example, the seat-cushions and upholstery are different, while the shape of car seats also vary between different brands.
      So far, Kostiainen has not noticed any signs of a decline in sales of new cars as a result of the threatening economic downturn.
      ”The Finnish consumer seems to be awfully brave in that respect”, Kostiainen feels.
      Kostiainen points out that the number of Skoda cars sold in Finland could have been even higher.
      ”We have not managed to get all cars our customers would have required from the factory. Modern technology, including fuel-efficient TSI engines and the automatic DSG gearbox, is now much in demand. However, the supply situation is getting better all the time, and some models can be available quickly to order”, Kostiainen continues.
      In June of this year, demand was strong enough to propel the Skoda Octavia to within a cat's whisker of being Finland's best-selling new car: only the VW Golf sold more, and then only by a handful.  
     
     
Helsingin Sanomat / First published in print 24.8.2011


Links:
  Skoda Auto (Wikipedia)
  Best-selling cars in Finland in June 2011 (in Finnish; the Skoda Octavia was only narrowly beaten into 2nd place, and the Superb was in the top 20 models)

JUKKA PERTTU / Helsingin Sanomat
jukka.perttu@hs.fi