Skoda looks to strengthen footprint in China, plans to double sales by 2020

Carmaker plans to take an equity stake in the Chinese JV and also plans to invest around 2 billion euros (Rs 15,288 crore) in developing its model range for the China market.

By Autocar Professional Bureau

31 Mar 2016

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L-R: Skoda CEO Bernhard Maier and president of SAIC Motor Corporation Chen Zhixin signed an MoU for 2 billion euros in expanding the model range and developing new technologies.

Skoda is betting big on the Chinese automobile market. The Czech carmaker, in association with its Chinese JV partner SAIC Volkswagen Automotive Company, is now looking to strengthen its presence in the world’s largest automobile market. China is also Skoda’s single largest market.

By 2020, Skoda is aiming to double its sales in China to reach a volume of more than half a million cars. Last year, the brand sold 281,700 cars in the country.

Following a state visit of the Chinese president Xi Jinping to the Czech Republic on March 29-30, 2016, a memorandum was signed between Volkswagen, SAIC Motor Corporation and Skoda Auto in the presence of the Chinese and Czech presidents.

Under the agreement, SAIC Volkswagen Automotive Company plans to invest around 2 billion euros (Rs 15,288 crore) over the next five years in the development of Skoda’s model range in China. This amount also includes expenditure for pioneering electric drive concepts, the connectivity of Skoda cars to the Internet and the digitisation of individual mobility. In addition, Skoda plans to take an equity stake in the SAIC Volkswagen Automotive Company Limited.

According to Skoda CEO Bernhard Maier, “Our aim is to double Škoda deliveries in China by 2020. For this, we’re now laying the foundations together with SAIC Volkswagen.”

The focus will be on expanding the carmaker’s model range and investing in pioneering automotive technologies. Skoda is currently preparing a comprehensive SUV campaign for the Chinese market with its JV partner. At the end of April, it plans to showcase the VisionS concept for the first time in China at the Beijing Auto Show. The VisionS provides a glimpse of Skoda’s new large SUV model whose launch in China is planned for the first half of 2017. It also plans to introduce a crossover utility vehicle (CUV) in China.

Skoda is clearly banking on Chinese customers’ interest in modern SUVs. Sales of the Skoda Yeti, which is produced at the Anting plant, have risen by over 300% in the first two months of 2016 compared to the same period last year.