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Skoda boss Zellmer: future in China and Russia uncertain

Is Skoda withdrawing from two major markets? According to brand boss Klaus Zellmer, a decision should be made in this regard. There is already a plan B.

For Volkswagen, business in China has been suboptimal for some time. But the market is more important to the Wolfsburg-based company than any other, which is why the group has had a board member dedicated to this topic in Ralf Brandstätter, the former head of the core brand, since the summer of 2022. Since moving to the new post, Brandstätter has been considering with his board colleagues and the heads of the individual group brands how VW could reverse the thrust in China.

Skoda is at the center of the considerations. In China, the Czechs, together with Volkswagen's joint venture partner SAIC, manufacture both models known from Europe (e.g. Octavia, Kamiq and Kodiaq) and market-exclusive derivatives (e.g. the Kodiaq GT as an SUV coupé or long-wheelbase versions of the Karoq and Octavia). However, this could soon be over. In an interview with "Automobilwoche", the new Skoda boss Klaus Zellmer announced that the brand could withdraw from China.

"Very intense competition" in China

"There is very intense competition there. Together with the Chinese joint venture partner, we will look at how we want to continue there," said Zellmer. In this case, the field would be left to the "strongly present" core brand Volkswagen in the Asian giant. However, it is also possible that Skoda only maintains its sales in China, but no longer builds cars. The result is currently open; a decision should be made in 2023.

In addition to China, Russia is also available for Skoda. Within the VW Group, the brand is responsible for the Russian business. But since the Russian invasion of Ukraine, all production and sales activities in Russia have been stopped across the group. According to Zellmer, this alone will make Skoda a loss in the hundreds of millions for the current year. With regard to this market, too, the future of the brand is uncertain.

"Expand market position in India more broadly"

But there is an alternative market for Skoda: The manufacturer is pushing ahead with activities in India for the VW Group and has the Kushaq (see photo show) and the Slavia (see video) on site manufactured exclusive models in the portfolio. "We are very involved here," says Zellmer. For the brand, this is the third most important market after Germany and the Czech Republic, he adds in an interview with "Edison Media". "If you look at the current geopolitical situation, it helps to have more than one foot." Skoda wants to broaden its market position in India.

Conclusion

Out of China and Russia, but more into India: That could be a realistic scenario for Skoda. But competition is also likely to intensify in India: Carlos Tavares recently announced that his Stellantis Group could also become more involved there - possibly even with the perspective of producing cheap electric cars for the European markets there. Whether something like this is realistic for Skoda will be decided soon.

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