Current Affairs Skoda heads for the Chinese market
The days when Czech-made Skoda cars used to be the butt of jokes are long behind us, and today Skoda is one of the most successful divisions of the Volkswagen Group. This was borne out this week at the Beijing Motor Show, as David Vaughan now reports.
Skoda Octavia
In Beijing Volkswagen announced its new strategy for China, currently one
of the most attractive and competitive emerging markets. And it hopes to
conquer the market with none other than the Skoda Octavia. Up to now
Volkswagen has focused on the far smaller Polo, but it has found to its
cost that what the Chinese want is a large, cheap and straightforward
model, rather than a small and complex car. In this respect the Octavia
fits the bill perfectly.
VW has been losing out on Chinese markets against General Motors, Toyota and Honda, and VW chief executive, Bernd Pischetsrieder, acknowledged that the decision to focus on the Polo had been a serious mistake.
But now Volkswagen wants to double the capacity of its Chinese plants, and Skoda has confirmed that plans are being considered to assemble the Octavia directly in China.
Skoda Octavia
But marketing the Octavia poses something of a problem. The Volkswagen
brand is well-known and respected in China, while Skoda remains virtually
unknown. VW management is considering a simple solution. The
Czech-designed Octavia will go onto the Chinese market with a simple VW
label. This is nothing unusual in the motor industry, where on the British
market, for example, the Opel Astra has never been known as anything other
than a Vauxhall.
China will be Skoda's second major foray onto the Asian market. With some success it is already beginning to export to India.
But success isn't guaranteed. In order to succeed on the competitive Chinese market, the Octavia will have to be sold at a rock-bottom price, leaving little space for quick returns.
