Regional Markets
Regional Markets
New Opportunities Are Opening Up
ŠKODA AUTO took over regional responsibility for the entire VW Group in North Africa and in Russia. What do these markets offer?
hen speaking about the North African region, most people do not think first about, the ideal car market. However, there are 250 million people, most of them young, living in this fast-developing area,, and there’s a demand for reliable and practical cars. People in North Africa know the ŠKODA brand and associate it with a long tradition. In ŠKODA Museum archive, there are pictures of L&K cars in the year 1909 in Egypt. „As part of VW Group, our goal is to become one of the strongest players on the markets. We see great potential, especially in Egypt, Morocco and Tunisia, where SKODA achieved the best market share in our history in 2020. It is also important to us being on the steering wheel and coordinate the strategy among the Group. It will enable us to have a better overview on the growth potentials and develop the best adapted offer to our various customers in the region”, explains Arwa Oeljeklaus who took over management of the North African region at ŠKODA AUTO on 1 January (see page 2).
There are no future car sales without after sales. Customers in North Africa are as demanding as they are in Europe. “Excellent after sales service is key pre-requisite for building and further strengthening of the brand reputation and that applies to North Africa as well as to any European market,” says Jan Procházka, Head of VA2 – After Sales Region 2.
Egyptian market
The demand in the automotive segment is mainly driven by Egypt, which has a population of 100 million. Households still own a relatively low number of cars there, so aim of ŠKODA AUTO is to bring in new customers. The government is also striving to rejuvenate its vehicle fleet – this year’s plans project 70,000 old cars to be decommissioned; in the next two years, this figure should reach up to 180,000 cars. The government is as well promoting greener powertrains such as CNG.
Other countries
With favorable custom duties to import cars from Europe and a growing SUV segment in all those countries, SKODA has the right assets to continue its performance path.
In Algeria, SKODA has to lead the business restart in a market that has the potential to be the largest in the Region. However, the largest purchasing power in the region is offered by Morocco where cars are owned by the largest percentage of households. ED
Potential in Russia and Southeast Asia
Taking over responsibility for the Russian market comes at a time when the Czech carmaker is successfully growing there. Last year, it delivered 95,000 cars to customers in the country, which makes it the carmaker’s third-largest market overall. The ŠKODA brand is currently the sixth-best-selling brand in Russia. Customers are fond of chrome accessories and require a perfect connection for their smartphones. “Three-quarters of the cars are sold from warehouses; it’s not common for a customer to first configure a car and then wait for it to be produced. On the contrary, when the customer comes, they want the car right away, so the dealers have to be able to react flexibly. The Russian market is challenging, the current political situation and the country’s relations with the world are turbulent, the exchange rate developments are unpredictable, and the country is dependent on oil. All of this poses a lot of challenges for us”, outlines the GRR department’s Ondřej Černý, who is in charge of another promising region: Southeast Asia. Following its successful entry into Singapore and Brunei in 2017, ŠKODA AUTO began examining the possibility of engaging other markets in this region, which has a population of approximately 650 million and where 3.4 million cars are sold annually.