Skoda Auto plans to boost production by almost 50% by 2010, with most of that growth coming from new foreign operations, chief executive Detlef Wittig was quoted as saying.
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Long parent Volkswagen’s shining light in eastern Europe, Skoda is now staking its future on expansion in fast-growing markets even further east, according to Reuters.
“One of the major changes will … be that we will become a foreign manufacturer with a heavy weighting in emerging markets such as China, India and Russia, because the major growth will come from these markets,” Witting told the news agency in an interview.
He reportedly said Skoda, which had 2006 sales of EUR7.1bn and now sells mostly in western Europe, would lift production to 616,000 cars this year from last year’s 556,347, building on a 15% rise in unit sales so far this year.
“I can see the growth rate for the next three, four, five years to continue. Maybe not at as fast a pace (as in recent years), but I can imagine we can expect a (growth) rate of somewhere between 5 and 10%,” he told Reuters, adding: “At around 2010, we may be able to reach 800,000.”
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By GlobalDataAccording to the report, most of the growth will come in emerging markets, where Skoda sees high potential and can limit costs thanks to cheap labour and avoidance of import tariffs.
Wittig told Reuters Skoda was looking to make 30,000 cars in China this year, the first year of operations, and was eventually targeting 100,000 units there.
It also aims to make 50,000 to 60,000 cars annually in Russia by around the end of this decade and eventually raise output in India to 40,000 to 50,000 from 20,000 this year, the report added.
He told the news agency Skoda would invest between EUR300m and EUR400m annually in the coming years, building upon the EUR3.9bn invested in the company since VW took over in 1991.
According to Reuters, Wittig said Skoda was looking to expand its current product line of four models – the small [and just redesigned] Fabia and Roomster, the mid-sized Octavia and the Superb limousine.
It should be “something that fits demand in emerging markets, something below the Fabia range,” Wittig reportedly said.
Wittig reiterated the company’s dissatisfaction with the strength of the Czech crown, which has dented profits of the country’s biggest exporter, Reuters said.
