Skoda expects sales in China to total 500000 vehicles in 2018

Gasgoo.com (Shanghai March 19) - With the debut of the new five-door Citigo subcompact, Skoda has made its ambitions for the future clear. The Czech manufacturer sold 879,200 vehicles last year, the best yearly performance in its 117 year history. Skoda has set a lofty sales goal for 2018 of at least 1.5 million vehicles sold globally.

In an interview with Beijing News, Skoda Board Chairman Winfried Vahland (pictured above) confirmed that the manufacturer will aim to develop its operations around the world, and especially in China. He predicts that one-third of the anticipated 1.5 million sales in 2018 will come from China. An excerpt of Dr. Vahland's interview with the paper follows:

Beijing News: "After managing sales of 220,000 vehicles [in China] last year, how do you feel about Skoda's prospects in the country this year?"

Dr. Vahland: "China is Skoda's most important market, and is also a second home to us. A lot of people are sometimes a little bit pessimistic about the Chinese market, but I personally have a very optimistic outlook [on it]. Skoda's sales growth this year will exceed the market average. Currently, we are participating in discussions with Shanghai VW regarding expansion. After resolving these questions, I predict Skoda's Chinese sales volume to be even larger by 2013. [If we can increase production capability], sales of models like the Octavia, which are suited to Chinese tastes, will be even greater."

Beijing News: "In the 1.5 million sales target for 2018, how many sales will come from the Chinese market?"

Dr. Vahland: "Since [Skoda] currently possesses a developed foundation, we predict to meet our 2018 target ahead of time. Thanks to the help of the Chinese market, Skoda has the potential to become Europe's fastest growing brand. Currently 60 percent of Skoda's sales come from the European market, [while] the remaining 40 percent are exports from other markets. In the future we predict markets outside of Europe to account for 60 percent [of our sales], or about 900,000 vehicles. According to my calculations, of these 900,000 vehicles over half will be sold in China. Therefore, if production capability and [the size of the] product range are as planned, Skoda's Chinese sales will reach 500,000 vehicles [in 2018]."

Beijing News: "Are there any measures to ensure that the 500,000 sales goal is achieved?"

Dr. Vahland: "One part is an increase of our production capability in 2014, which will be completely finished by 2015. The other part is updating our product line. Chinese production of the Yeti (SUV) will begin next year. There is also a brand new compact sedan, slightly smaller than the Octavia and larger than the Fabia, as well as proposals to build a SUV larger than the Yeti in China. Furthermore, there are also considerations to update current models. If these product [plans] can all be achieved, the 500,000 sales target can be met."

Beijing News: "Will the newly debuted Citigo (pictured below) not come to China?"

Dr. Vahland: "The Citigo is a model specifically designed for European market safety and emission standards. Its starting European price is equivalent to 90,000 yuan ($14,288). This price may be a little too expensive for the Chinese market. The average age of Chinese buyers is around 35 years, and it is around this age that Chinese drivers like to show off their individual style. I have previously stated, Skoda is absolutely not preparing to sell a model less than 65,000 yuan ($10,319), as there is no way to ensure to make safety and quality guarantees. On this issue, we will make no compromise."

Beijing News: "Are you not preparing to export any models? To date Skoda has not sold a single imported model in China."

Dr. Vahland: "We are considering this issue. There is definitely no shortage of Chinese customers who would very much prefer to purchase a European made automobile. However, [we] still need to research this question with our joint venture partners. We are not able to reveal anything in advance. For example, the Octavia Combi Scout has attracted a lot of attention. However these kinds of models will not see large sales, so it would be difficult to localize them for China. If we can bring it to China, it will enrich our product line in the country. However, since we are cooperating with Shanghai VW in China, we prefer to consider the issue together with them."