Lowcost Skoda? Only a fool would now decide to throw the brand’s current reputation in the trash

Today, almost 42,000 Škoda Auto employees have a new boss. A 50-year-old German and top manager of Volkswagen, Thomas Schäfer, took over the management of the Mladá Boleslav carmaker through Germany, the USA and South Africa. What will he do with the national brand?

Both the company’s employees and the Czech public, which considers the carmaker to be a national treasure, were frightened last week by the words of the head of the entire concern, Herbert Diess. He told the Frankfurter Allgemeine Zeitung that it was useless for the company when Škoda was transformed into the company’s third premium car manufacturer – Schäfer himself had not yet commented on his next steps in the new position. However, it is clear that at present he is most busy with the task of leading Škoda out of the coronavirus crisis, accompanied by a fall in sales and sales.

Compared to last year, the Mladá Boleslav brand’s operating profit fell by three quarters to a total of six billion crowns. Škoda Auto then sold a third less new cars: 372 thousand.

“In reality, we will not know for many months what specific impact the new director will have. A number of key and investment decisions in this sector are several years ahead. In addition, at the moment, everyone is facing unpredictable developments in the entire market, ”concludes Petr Knap, an automotive analyst at EY.

Even the strong Škoda trade unionists are not too calm in connection with the appointment of the relatively unknown Schäfer. “It’s a so-called rabbit pulled out of my hat, which I’ve practically never heard of. It comes from South Africa, within the brand it is called a larger workshop, it is something smaller than Kvasiny. A month ago, I talked to him, I asked him the number one question, whether he was coming to dampen the Skoda or to develop it. And he said: I always play for the team where I am the captain, “said Jaroslav Povšík, chairman of the corporate council, for ČTK. And he was not alone in skepticism.

Others, however, allay fears that the Škoda would turn into a low-cost car manufacturer such as the Romanian Dacia after Schäfer took office. “Thomas Schäfer is unknown in the Czech Republic and possibly also in Europe, but he has been working in the automotive world for a long time,” says Jakub Rejlek, editor-in-chief of the motoring magazine Faster.

He comes across the fact that Schäfer worked for many years in the Daimler AG group before working for Volkswagen, where, for example, he helped start the sale of Mercedes-Benz cars in China and Malaysia. “From my point of view, it will continue at the established pace of Škoda. At the moment, it is not possible to make drastic changes that would take effect immediately, because carmakers are set up so that cars that appear in three years are already developed and planned for production and sale. Its fundamental steps may begin to show in three to five years, “says Rejlek, who also points out that attempts by Škoda to produce cheap products have occurred several times in the past. However, they never turned into reality.

“I understand the thinking of parent Volkswagen, because Volkswagen AG currently has three brands that are too close. Volkswagen, Seat and Škoda produce very similar cars, either in quality, design or price. The only brand that stands a little higher is Audi. Especially now in the crisis, the VW Group is missing one brand that would produce cheaper models, “admits a motoring journalist.

In addition, Rejlek recalls the little-known history when Volkswagen wanted the Škoda brand to compete with the Swedish Volvo after taking over the Czech brand. That’s why the first Octavia and Fabia were such durable and robust models.

“In short, it was not planned that it would be a cheap offshoot of the Volkswagen brand. That’s why the first generation of superb came. And this is how it goes with Škoda. It is constantly improving, improving its quality, increasing its prestige, and recently a very attractive design has been added to this. Škoda is the most profitable brand after the Porsche Group in the Volkswagen Group. Only a fool would now decide to throw the current reputation of the brand in the basket and start producing lower-quality cheap cars, which also have minimal margins, “explains Rejlek, according to which there is no need for a comparison with the currently successful Romanian Dacia.

The situation was different with Dacia. After the entry of Renault, the Romanians used only its older, already developed and paid technology, their own modern development practically did not take place.

“But can Škoda afford to produce a car with old technology at once, which will reach a maximum of three out of five stars in crash tests? In my opinion, no one can expect it, and even if such a plan is implemented, it will take several years before you push it into people’s heads in marketing without guaranteeing success. Maybe in the Czech Republic, but certainly not in other European countries. Why would the French buy a cheap Škoda when they have Peugeot and Citroën or Renault cars, “Rejlek asks eloquently.

In addition, the fact that Volkswagen currently does not even have a portfolio on which to build. In the pursuit of savings, he would have to develop completely new models, which does not make economic sense. Moreover, at a time when every gram of emissions produced is being addressed and electromobility is beginning, which, on the contrary, is extremely expensive from the point of view of development.

According to Rejlek in Škoda Auto, the only way the inclination towards a cheap concept of new cars can be reflected in Škoda Auto and how the new head of the carmaker can quickly intervene in the current offer are the cutting-edge equipment line. Even so, due to the safety systems that are already a common part of every new car today, it will not be a completely cheap affair.

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