Skoda moves ahead on a positive growth track

The year 2011 was the best fiscal year for Skoda as it has been successful in terms of sales, deliveries, and profits. Czech car maker’s deliveries to customers from January to December 2011 have been registered to 879,200 units, which is 15.3 per cent higher than January 2010, which were 762,600 units. In 2011, the company registered 18.1 per cent growth in sales at 10.3 billion euro, which was only 8.7 billion euros in 2010. Hence, for the first time the company was successful in crossing the 10-billion-euros mark.

Compared to 447 million euros in 2010, operating profit of the company increased to 743 million euros. Hence, 66.1 percent growth has been registered. According to the company, it is prepared for the future. By 2018, Skoda aims to increase deliveries to 1.5 million cars per year. The credit goes to rapid industrialisation and new models. Skoda exhibits its aggressiveness by its Citigo subcompact and the Rapid saloon, which is introduced in India.

At the company’s annual press conference in Prague, Škoda CEO Winfried Vahland, said, “Our Škoda growth strategy is bringing results,” He further added, “We improved both in terms of deliveries and in financial terms, creating an excellent base for our growth course in years to come,” said Vahland. “My special thanks go out to ŠKODA outstanding staff, for without them such an impressive result would not have been achievable.”

In 2011, the brand was successful in improving its market share in all individual markets. Further, in all sales regions, Skoda also became stronger than the overall market. At December 31st, 2011, the global market share of the brand increased to more than 1.4 per cent.

In Eastern Europe, Skoda achieved highest growth of 47 percent. Strongest individual market of the region was Russia where it sold 74,100 units thereby attaining growth rate of 62.5 per cent. In 2011, Asia was clearly marked by growth. The company attained 50 percent growth in sales. In China, which is the main market of Skoda, the company sold 220,100, which is 21.9 per cent higher.

While 1.5 per cent downfall has been registered in Western Europe’s market, Skoda managed sales increase of 8.6 per cent. In Germany, Skoda models were demanded and the company attained sales growth of 13 per cent. In Central Europe’s declining market, 1.7 per cent sales growth has been registered by Skoda.

High sales performance of the company’s is due to its attractive model palette. Vahland said, “Outstanding design, a generous room offering, top-of-the-line quality, everyday and family practicality as well as an excellent price-to-value ratio, this is what makes our cars special,” He added “Our new models will create even more of a tailwind for us.” Corporate customers are increasingly demanding Skoda cars. More than 239,000 cars are sold by Skoda to fleet operators attaining 26.7 per cent growth.

Skoda’s most popular model for 2011 was Octavia and this is confirmed from its sales increase of 10.7 per cent to around 390,000 units. In the internal sales ranking of Skoda, Fabia attained the number two ranking with 267,000 units attaining growth 16.5 percent. Last year, Skoda crossed the 100,000 lacs sales barrier pushing the sales to 117,000 units out of which Chinese market consumed 48,000 units. Hence, 18.1 per cent growth has been attained by the company.

Out of all Skoda models, strongest growth has been attained by Yeti. Selling 70,000 models, the company managed to attain growth rate of 33.7 percent. The company expects that it can sell 100,000 units per year in the near future. One of the factors which will contribute towards the growth is the production of Yeti in Russia and China, which will start in 2013. Skoda selling 36,000 units attained growth of 11.4 per cent.

Citigo subcompact and the Rapid Indian compact saloon, which is the number six and seven model lines of Skoda made an excellent start. In late 2011, in the Czech home market, the Citigo made its sales debut. From May 2012, the car will be introduced in the European market. The Rapid, which was sold at the end of 2011 in India, became the second largest selling model for the company. It attained the status of India’s “Family car of the Year”.

Financial figures of Skoda shows the success of the brand in 2011. From 10.3 billion, revenues increased to 18.1 per cent crossing the ten-billion euro mark. The company attained operating profit of 743 million euros and advance 296 million euros thereby pushing the growth to 66.1 percent against last year. 7.2 percent growth has been registered in the operating return on sales.

Winfried Krause, Škoda’s Chief Financial Officer, said, “More than 10 billion euros in revenue and almost three quarters of a billion in operating profit, those are figures than confirm ŠKODA profitability and financial solidity.” Before income tax, profit was 783 million euros and after tax it was 652 million euros.

Skoda’s financial performance on the revenue side was down to higher sales. Additional reduction cost has also helped on the expenditure side. The company also increased its spending on plant by 165 million euros for reaching 568 million euros. Krause, further said, “Judicious investment in products, structures and capacity will be the basis for further growth.”

Škoda CEO Vahland, said, “2011’s solid performance and a great team means we are well prepared for the years ahead.” He added, “Dedication, sales performance and profitability will form the basis for ongoing success.” Vahland went on, “Our future is profitable growth, and this will be our mission in 2012 as well.”

The 147,500 cars sales figure, which helped Skoda attain growth of 11.6 percent, reflects the high growth of the brand in first two month of 2012. However, in several European markets, there are economic uncertainties for rest of the year. Skoda will be expanding its model fleets in 2012 and the coming year. After the success of Rapid and Citigo, Skoda aims to launch a new compact saloon in the markets of Europe.

At the 2011 IAA in Frankfurt, the close-to-series “MissionL” study provided a preview. The company is also strengthening its global presence in both Eastern Europe and Asia apart from the key markets of Europe. Vahland, said, “Despite a slight dulling of the overall business environment in Western Europe and some countries of Central Europe, we remain cautiously optimistic for the future.”

Share via