Skoda says it is strengthening its presence in China in cooperation with its longstanding Chinese joint venture partner SAIC-VW. It says it plans to expand the model range offered in China and invest in ‘pioneering automotive technologies’. SUV segments are targeted and the VW-owned brand wants to double China sales to almost 600,000 units a year by 2020.
A memorandum was signed by Volkswagen, SAIC and Skoda in the presence of the Chinese and Czech Presidents. Under the agreement, Joint Venture SAIC-VW Automotive Company Limited plans to invest around EUR 2 billion over the next five years in the development of Skoda’s model range in China.
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Skoda said the sum also includes expenditures for “pioneering electric drive concepts, the connectivity of Skoda cars to the Internet and the digitization of individual mobility”. In addition, the companies also agreed that, subject to approval by the Chinese authorities, Skoda would assume an equity position in Joint Venture SAIC VOLKSWAGEN Automotive Company Limited.
“Since entering the market nine years ago, Skoda has made some very positive developments on the Chinese auto market, which has since become our largest single market,” says Skoda CEO Bernhard Maier. “We owe this success to our attractive model range and the very constructive and friendly cooperation with our longstanding Chinese partner SAIC VOLKSWAGEN Automotive Company Limited,” said Maier. “With today’s agreement we’ll be strengthening our brand’s presence on the Chinese market. In the coming years, we’ll rapidly expand Skoda’s offering to include forward-looking vehicle concepts and modern technology. Our aim is to double Skoda deliveries in China by 2020. For this, we’re now laying the foundations together with SAIC Volkswagen.”
The show car VisionS recently gave the start signal for the SUV campaign as well as innovative electric drive systems on the Chinese market, Skoda says. With respect to Skoda’s planned equity interest in the Chinese Joint Venture, Maier said: “We are pleased that we will be able to significantly strengthen our brand’s presence in the Chinese market through this interest in the Joint Venture SAIC VOLKSWAGEN Automotive Company Limited. The equity interest in the company is the basis for the independent branding of Skoda cars and consequently the Skoda brand’s profiled staging in China.”
Skoda is currently preparing a comprehensive SUV campaign for the Chinese market with the Joint Venture partner. In relation to this, the Skoda VisionS design study will be presented to the Chinese public for the first time at the end of April at the automotive show in Beijing. The VisionS provides a glimpse of the new large SUV Skoda model whose launch in China is planned for the first half 2017. As part of the SUV campaign, another body variant of Skoda’s large SUV is already in development. In addition, the brand intends to bring out a crossover utility vehicle (CUV) for China.
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By GlobalDataChinese customers’ interest in modern SUVs has been demonstrated through the sales of the ŠKODA Yeti, which is produced at the Anting plant with a six-centimetre longer wheelbase compared to the European version, increasing more than 300% in the first two months of 2016 compared to the same period last year, Skoda says.
Since 2007, Skoda’s deliveries to customers in China have increased from 27,300 to 281,700 vehicles in 2015. This currently corresponds to around a quarter of the brand’s total sales. China has been the most important single market worldwide for Skoda since 2010.
