According to sources from the Volkswagen Group, Volkswagen is looking for ways to increase Skoda's production, including building a new factory outside the Czech Republic to meet the strong demand in the market.
Last year, Skoda entered the fast-growing SUV market with the new Kodiaq and Karoq models, and plans to launch another 19 models by 2020.
However, according to two sources from the Volkswagen Group, Skoda’s efforts to increase production at the Mlada Boleslav plant in the Czech Republic are stagnating due to unions’ opposition to extending workers’ working hours to Saturday. The plant produces more than 500,000 units a year.
In fact, if the union leaders agreed to work overtime, Skoda agreed to increase the number of jobs for 3,000 people, so that the annual production capacity at the Mlada Boreslav factory could increase by 83,000.
Skoda said in an e-mailed statement: "The extra capacity is absolutely necessary to meet the growing demand. The company has been increasing production for a while."
In the past, Skoda was a Western joke, and it has "grown" for nearly 30 years under the protection of the Volkswagen Group. However, due to the cheap labor of the Czech Republic and the “cheap†modular production platform of the Volkswagen, Skoda has become one of the drivers of the Volkswagen Group's profits, and even surpassed the operating profits of Audi and BMW last year.
Strong demand in China and Europe has increased Skoda's sales by more than a third in the past five years and reached a record 1.2 million in 2017.
The Chinese market remains the largest market for Skoda, with sales of 325,000 units in 2017, an increase of 2.5% year-on-year. In fact, China has been Skoda's largest single market since 2010. Skoda also plans to sell 600,000 vehicles in China by 2020.
According to sources, if the production capacity is not changed, by 2020, Skoda may have a sales target of 360,000 units. In recent years, the production of Skoda models has expanded in markets such as China, India and Russia.
According to the source, Volkswagen and Skoda plan to find a solution to increase production by this summer, increasing the number of countries that have sold overseas from about 100 to 120 by 2025.
Plans to expand production include looking for underutilized capacity within the Volkswagen Group and building new plants outside the Czech Republic. “The Skoda brand is very optimistic and we will be very happy, of course.†Volkswagen Group CEO Muller said in an interview that he hopes to solve Skoda’s capacity constraints. “Fortunately, our platform strategy gives us the opportunity to react in just a few weeks or months,†he said, referring to the group's strategy to maximize the number of parts used in the brand and product line.
Of course, Skoda management is also determined not to lose sales momentum. “We are stepping up the capacity of Skoda,†said Skoda CEO Bernhard Maier at the Geneva Motor Show. "We will continue to go this way with all our heart and soul."
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