Czech mates – Skoda and VW celebrate 25 years together | CAR Magazine

Czech mates – Skoda and VW celebrate 25 years together

Published: 14 April 2016 Updated: 14 April 2016

► Quarter of a century together
► Skoda joined VW in April 1991
► Czechs now make 1m+ cars a year

It’s 25 years since Skoda became part of the Volkswagen group – transforming the car maker that was once the butt of automotive jokes into a serious car maker now building more than a million cars a year.

The companies are marking their silver anniversary at an event today in Mlada Boleslav attended by the Czech prime minister Bohuslav Sobotka and VW chief executive Matthias Mueller.

Read in CAR+ the full story of how VW acquired Skoda.

Skoda and Volkswagen: a potted history

The German partnership is a relatively recent development in Skoda’s 121-year history. By the 1990s, several western car makers had spotted the potential of what was then Czechoslovakia’s established car maker and fancied tapping into the lower labour costs and sales potential offered in eastern Europe.

Back then, Skoda made just 170,000 cars a year and offered a single model line. The Czech government backed the bid from Wolfsburg and on 16 April 1991 a deal was struck to join the Volkswagen group. The Germans gradually increased their stake in Skoda until it owned 100% by May 2000.

‘Skoda is one of the longest-established car makers in the world,’ said Skoda CEO Bernhard Maier. ‘What began as a one-series producer with annual sales of 170,000 in the early 90s has since evolved into an internationally competitive car company with six model lines and over 40 versions. Nowadays, Skoda produces over one million cars per year at 14 production sites on two continents, selling products in over 100 markets.’

Skoda by numbers

While some would argue that Skoda’s have become duller VW clones justifying higher price tags, the numbers tell a different story. Under Volkswagen ownership, it now employs 28,500 staff, making it one of the bigger businesses in the Czech Republic, and VW has invested €11 billion (£8.8bn) in its ‘budget’ brand.

It seems to be working: it sold 1,055,500 vehicles in 2015 (up 2%), grew revenues by 6% to a record €12.5bn (£10bn) and – crucially – profits swelled by 12% to €915 million (£727m). And that growth continues: sales are up 4.3% in the first quarter of 2016 – and a suite of new SUVs, hinted at by the Skoda Vision S concept car (below), can only add further growth.

The Skoda Vision S concept: SUVs are coming...

By Tim Pollard

Group digital editorial director, car news magnet, crafter of words