VW Group’s Skoda Auto was in the final stages of quitting Russia after taking an almost EUR700m (US$742m) charge from the impact of Moscow’s war in Ukraine, its CEO said on Thursday, according to a Reuters report.
Czech Republic based Skoda had seen its Russian operation hit hard by the disruptions caused by the war and by western sanctions imposed on Russia, the report said.
According to the news agency, the carmaker also said Thursday net profit dropped 11.7% to EUR489m in 2022, affected also by a steep rise in material prices and global supply chain shortages.
Vehicle deliveries in Russia plummeted to 18,300 cars in 2022 from 90,400 in 2021 when the country was Skoda’s second largest market, Reuters said.
“The talks (on the sale) are in the final stages, but I can’t give you details until they are agreed by all parties,” chief executive Klaus Zellmer reportedly told an annual press conference streamed online.
He added Skoda aimed to replace lost Russian production at its other plants around the globe.
Reuters noted Volkswagen brand chief executive Thomas Schaefer had made similar comments also on Thursday.
Skoda board member for sales, Martin Jahn, said production and sales in 2023 should exceed last year when global deliveries dropped to 731,300 cars, Reuters added.
This should be helped in part by Skoda’s upcoming entry into the Vietnamese market, where it will start selling its cars in the second quarter. Jahn reportedly estimated the initial potential at 30,000 cars.
Skoda would also take over strategic management of VW’s expansion in South East Asia, Reuters said.