Markets and Costs under Control
News regarding the F5 and F6 action fields this year
THROUGH EFFICIENCY AND FLEXIBILITY TOWARDS GLOBALISATION
SIMPLY CLEVER SOLUTIONS
CHANGING MINDSETS TO SECURE THE FUTURE
Costs in the time of COVID
To maintain ŠKODA AUTO’s competitive advantage, costs need to stay at the lowest possible level over the long term. The onset of the COVID-19 pandemic amplified this goal. As a result, the F5 – Competitive Cost Structure action field has focused on monitoring and reducing all costs over the past year to improve the carmaker’s cash flow and prevent any cuts to the workforce. It has served as a good springboard for this year.
The issue of inventories and liquidity management is very topical at present. Together with colleagues from Production and Logistics, we have been implementing several measures in this area. One example is the current shortage of semiconductors, which are an essential part of car manufacturing. The carmaker has solved this complication thanks to its flexible and efficient control of the manufactured car flow. Thus, for example, it managed to save approximately 50,000 cars, and the total benefit of this solution was reflected in the company’s financial result, which totalled EUR 230 million. Unfortunately, the persistent shortage of semiconductors led to the suspension of the production of cars with internal combustion engines at the Kvasiny and Mladá Boleslav plants at the end of June. To resolve such situations constructively in the future, all the departments across ŠKODA AUTO must contribute to the financial benefits resulting from the FORCE Program. ED
Liquidity and cash flow management are among the most important activities that lead to maintaining the
Cooperation between brands and regions
The goals of the F6 – New Startup Challenges action field were also significantly influenced by the COVID-19 pandemic. For example, preparations for the launch of series production of the new KUSHAQ were affected by the halting of production of tools and mouldings from China already in the spring of the last year and then by the pandemic in India. Despite these complications, local production of the state-of-the-art 1.0 l TSI (85 kW) and 1.5 l TSI (110 kW) engines for this model was launched. The SAVWIPL production plants will now complete the cylinder heads and do the mechanical processing of the engine parts.
In addition to the INDIA 2.0 project, ŠKODA AUTO also took over responsibility for the Russian region in the autumn of 2020, where it will be in charge of two production sites – in Kaluga and Nizhny Novgorod. The first plant currently produces the VW Tiguan, VW Polo and ŠKODA RAPID models, and the local team is looking for synergies and technical solutions and optimising investments. The Nizhny Novgorod plant produces the KODIAQ, KAROQ and OCTAVIA models. They will be joined by the new VW Taos model introduced in May. The local team is now intensively preparing for the start of serial production. ED