We will expand capacities and markets
In a wide-ranging interview, Thomas Schäfer, Chairman of the Board, explains the direction the carmaker will take in the coming years
Where will you be spending Christmas and New Year’s Day?
I will be back at my old home in South Africa to organise the move to Prague with my wife. Until now, I’ve been living in a hotel in the centre of the capital. I’m looking forward to moving into my own four walls soon – with my wife and our three dogs.
Sounds like a busy holiday...
It won’t be too bad – we’re a well-coordinated team, and we’re used to moving. I hope the organisation won’t take too long (laughs), so there will also be time for the family and relaxation. After such a challenging year, we all need that.
I would like to thank all ŠKODA AUTO
employees for their commitment, for
pulling together with the company
and for managing the current
difficult situation responsibly along
with the KOVO Trade Unions.
What do you see as the biggest challenge for ŠKODA in the new year?
The effects of the corona pandemic will certainly be with us for some time. That is why it’s important that we keep a very close eye on our spending, continue our strong sales performance and remain vigilant about observing hygiene regulations. I’m appealing to the whole team – each and every one of us has a role to play and makes a difference!
What sales volume do you expect for 2020?
Without a doubt, the pandemic has left its mark, even in terms of sales results. We won’t be able to close the gap caused by the production shutdown in the spring because we’re already producing at the limit of our capacity. For that reason, in terms of unit sales, we expect earnings to be around 20 percent down on the previous year. Nevertheless, we will fight until the holidays for every extra car we can make.
What do you expect for 2021?
The coronavirus will not have disappeared by 1 January 2021, and we expect further limitations. That said, we’re very well prepared for the new year with our many new products.
What can we look forward to?
There’s plenty in the pipeline for the new year, and we will be continuing our campaign: From the new-generation FABIA in the entry-level segment and product upgrades of our best-selling KODIAQ and KAROQ SUVs to the ENYAQ iV derivative, we are refreshing and significantly strengthening our model portfolio. In addition, as part of our INDIA 2.0 project, we will be launching our first small SUV in India, which I have high hopes for.
Besides having Group responsibility for India, ŠKODA is now also responsible for Russia, the CIS states (Commonwealth of Independent States – nine of the 15 former Soviet republics) and the North Africa region. What do you expect from this, and what will be the next steps here?
First of all, this is a fantastic award for ŠKODA. By taking on ever more responsibility for the Group, ŠKODA’s position within the Group will be significantly strengthened. Both Russia and North Africa are two exciting regions with great sales potential for us. Egypt alone has around 100 million inhabitants. We are carefully analysing how we can best leverage this potential. The export opportunities from India, for example, are also interesting.
In recent weeks, there has been much talk about the SUPERB’s relocation to the Bratislava plant. What are the plans for the three Czech sites?
ŠKODA is responsible for developing the next generation of the SUPERB and VW Passat model family. Both models will be produced in Bratislava from 2023. This will free up space for more than 150,000 units at our Kvasiny plant. We are going to use this capacity for additional volumes of our popular KODIAQ and KAROQ SUV models and another ŠKODA model. This will allow us to flexibly shift production volumes between Mladá Boleslav and Kvasiny, which in turn will create space at our main plant for the successor to the FABIA COMBI. We fought hard for this model, and I’m delighted that our arguments were convincing. The FABIA COMBI is important to our goal of offering affordable cars.
All three production plants in the Czech Republic will continue to play a decisive role in ŠKODA AUTO's growth
in the future.
And what about the other two Czech sites in Mladá Boleslav and Vrchlabí?
We will continue to strengthen our production site in Vrchlabí as a high-tech component plant; capacity utilisation there is very high over the long term. We are also discussing what role Vrchlabí can play in the increasing electrification of our model portfolio – for example, by producing components for electric cars. In Mladá Boleslav, we manufacture our important models: the OCTAVIA, KAROQ, FABIA, SCALA and KAMIQ. In addition, we will be transforming the site into ŠKODA’s electric mobility centre. Our ENYAQ iV has been rolling off the production line since the end of November. In short, all three Czech sites will continue to play a decisive role in our growth strategy.
ŠKODA will be celebrating a special anniversary in 2021: 30 years in the Volkswagen Group. What does this anniversary mean to you?
Our company can be proud of its development over the past 30 years. The carmaker has developed into a strong and self-confident brand within the Volkswagen Group. In 1991, ŠKODA produced just one series, the FAVORIT hatchback with a combi version called the FORMAN. Today, there are 10 series. At that time, the company sold just over 170,000 vehicles per year; today, we regularly break the 1 million mark. And in my opinion, the greatest success: In 1991, ŠKODA employed 17,000 people, while today we can offer a secure job to over 40,000 Škodians. ŠKODA has become a real pearl of Czech industry – thanks to the dedication of the entire team and the principle of joint decision making combined with excellent cooperation with our social partner, the KOVO Trade Union, and the VW Group.
Now, of course, the question is how we will tackle the next 30 years...
Let’s look at the next 10 years first; there will be plenty to keep us busy (laughs)! Our responsibility is to continue the success story with the ŠKODA team by effectively guiding the company through the transformation process with the help of our ‘NEXT LEVEL ŠKODA’ programme for the future. We are focusing on three priorities: expanding our model portfolio towards the entry-level segments, exploring new markets for further growth in the volume segment and making tangible progress in the areas of sustainability, diversity and new business models. I am convinced that if any team can manage this, then it’s us! ED
NEXT LEVEL ŠKODA
We will grow!
The carmaker will expand the number of models, especially in the lower-middle class, and will include other electric cars in its portfolio. It will make better use of the potential of the markets where it is active – in particular, India and southern Europe.
We will broaden our scope!
Demand for cars with internal combustion engines in Europe will drop, which is why ŠKODA AUTO will ensure its growth by entering new markets. It will focus on the Russian region and countries in North Africa. It will also focus on the ASEAN (Association of Southeast Asian Nations – Indonesia, the Philippines, Vietnam, Thailand, Myanmar, Malaysia, Cambodia, Laos, Singapore and Brunei) countries, home to more than 660 million people.
We will be engaged!
In cooperation with our partners, the carmaker will make significant progress in the sustainability and diversity field. By 2030, electric cars will make up 55 percent of new cars.
The path to growth
From 2023, production of the SUPERB model will move from Kvasiny to Bratislava.
This move will allow the carmaker to increase the production volume of popular and profitable KODIAQ and KAROQ SUVs. In addition, it will free up capacity in the Kvasiny plant for another ŠKODA brand model.
The Mladá Boleslav plant will produce the important OCTAVIA, KAROQ, FABIA, SCALA, KAMIQ and ENYAQ iV models. Thanks to the latter, it will be transformed into an electromobility centre for the ŠKODA brand.
In the case of the Vrchlabí high-tech plant, ŠKODA AUTO management is discussing how it could participate in the increasing electrification of the model portfolio – for example, by producing components for electric cars.
In addition to India, the ŠKODA brand is now also responsible for Russia and the Commonwealth of Independent States (nine of the 15 former Soviet republics), as well as the North African region. It will also focus on Southeast Asia.