Anniversary - 30 Years with VW

he Mladá Boleslav carmaker is currently commemorating an important anniversary. On 16 April 1991, the agreement that entered into force ushered in the merger of the then-ŠKODA company, a joint-stock automobile company, with the VW Group. Over the past 30 years, this regional leader has become a dynamically growing player of global significance and is currently active in more than 100 markets. This mutually beneficial cooperation with a strong strategic partner has made it possible to effectively develop the Czech brand’s considerable potential rooted in a tradition dating back to 1895. The VW Group, one of the most successful car manufacturers in the world, demonstrated its foresight and determination by taking this step.

Key decision 

By the time the communist regime collapsed, ŠKODA AUTO was producing less than 200,000 cars a year and was burdened by the high debt it had incurred while developing and launching a modern concept model line: the FAVORIT hatchback and FORMAN station wagon. It did not stand a chance to succeed on the world market without a strong strategic partner. That is why the Czech government, led by Prime Minister Petr Pithart, decided to privatise the state-owned company, and in the summer of 1990, addressed eight of the 24 originally considered carmakers in Western Europe and overseas. The Czech brand’s main triumphs included the aforementioned competitive car and a qualified, creative and motivated workforce, as well as a tradition of designing and manufacturing its own cars since 1895. Offers were eventually submitted by four bidders. In August 1990, the selection was narrowed down to the Renault–Volvo alliance and the Volkswagen Groups. Following government meetings on 9 and 10 December, an agreement on future cooperation was signed on 21 December 1990 with the winning project submitter, the VW Group. Based on their own negotiations with their German colleagues, the trade union at the Mladá Boleslav carmaker also supported the deal. Unlike its competitor, the German corporation submitted its generous investment plan and committed itself to developing the brand and continuing production of the modernised FAVORIT model. On 16 April 1991, the VW Group acquired a total of 31 percent of the shares of the Mladá Boleslav carmaker for a deposit of 620 million deutschmarks. This was followed by a gradual shareholding increase to 100 percent, which it reached on 30 May 2000. 

Bet on people and technology 

ŠKODA AUTO’s dynamic development would not have been possible without a generous and comprehensive investment programme coordinated with the other Group brands. Hundreds of billions of Czech crowns were invested in the new models, as well as research and development, and in expanding production capacities and building the ŠKODA brand’s sales and service network in the Czech Republic. The carmaker’s Development department has grown from about 600 employees in 1991 to its more than 2,000 highly qualified specialists today. Traditionally, great attention has been paid to developing human resources. The carmaker’s pillars of social responsibility include the area of technical education for young people, but not only at the secondary education level, which has a long tradition in Mladá Boleslav. Since 2000, the ŠKODA AUTO University has been operating in the Central Bohemian car city as well.

Transformation into a global player 

Since 1991, the number of ŠKODA cars produced per year has increased more than six times, and since 2014, the number of ŠKODA cars delivered to custmers worldwide has regularly exceeded 1 million. The original three Czech production plants were gradually joined by factories in China, Russia, Slovakia and India, where the company mostly produces through its Group partnerships, as well as in Ukraine, in cooperation with its local partner. In addition to its cars, ŠKODA AUTO independently develops and manufactures components and assemblies, such as engines and gearboxes. It is also responsible for the activities of the entire VW Group on the Indian subcontinent and in Russia and North Africa. However, the company’s heart continues to beat strong in Mladá Boleslav, where the traditional Czech carmaker’s headquarters and main production plant have been located since 1895. As part of its current NEXT LEVEL ŠKODA programme, the successful VW Group brand is focused on expanding its model portfolio to include affordable car segments, operating in new markets for its further growth in the high-volume segment and specific advances in ecology and diversity.  ED

Did you know that... 

… in 1987, a series of tests of one of the ŠKODA FAVORIT model prototypes with their built-in VW engines of the EA 827 and EA 111 series took place in Wolfsburg? In the end, the licensed production of these engines that was being considered did not pan out for financial reasons, but the positive impressions and the contacts that were made facilitated the subsequent negotiations.