Škoda Auto is now losing some important markets. What does the current situation in production and sales look like in Ukraine after a sales point in Kyiv was destroyed by a missile some time ago?
In the summer, we resumed the assembly of cars in Ukraine, but the volumes are still relatively low, an order of magnitude higher than dozens of cars per month, and the market there is very affected by the war situation. We anticipate that the market will pick up again when the war is over, and we hope that the recovery will be swift.
Due to Russia’s attack on Ukraine and subsequent sanctions, you lost the Russian market at the same time. Are you thinking of leaving here for good?
Production in Russia is stopped, stock cars that have already been produced have been sold and nothing is being sold there. Production could be resumed only if the fighting in Ukraine ends, sanctions are lifted, and if logistics can be restored. There is no question that production would resume in Russia in the foreseeable future.
At the same time as these markets, you are also losing China, where sales are falling off very quickly. What are the possibilities of resurrection there?
Together with our Chinese partner Saic Volkswagen, we are trying to find a solution to continue on the market. We suffer there from a lack of components and the lower profitability of our cars, which also leads to a lower allocation of components for production within the group’s other brands. We do not expect a significant improvement yet.
It is suspected that the Chinese have copied the technology and now they will no longer need you, do you have such signals that the production should stop completely?
That’s a conspiracy theory, the market there is more likely to shift to electric cars. Local brands have not only reached a very good technological level in terms of quality, but also in terms of design and connectivity. They have a wide offer in the field of e-mobility.
It is happening that Chinese brands will increase their market share, which is logical, because China was one of the few countries in the world where local brands did not have the majority, as is usual in Germany, France and here. I do not think that the Chinese would not want European brands on the market at all, rather the share of local carmakers will increase in order to balance the forces.
Do you expect Chinese brands to gain ground here as well?
They will certainly come, but even Korean and Japanese brands took a long time to establish themselves in Europe. I don’t think they will start to dominate or gain any significant market shares here. Building a service network alone would be lengthy and complicated.
Škoda headed to India or recently to Vietnam, are these markets able to replace China and Russia? The numbers don’t quite match it yet.
Not that they would completely replace it in terms of volume, but it is a certain possibility of growth for us. India is off to a very good start, it is not so troubled by global problems, it is not affected by the war in Ukraine or the collapse of supply chains, so the market there and ultimately e-mobility will develop faster than expected. The Indian government is also introducing CO2 limits, so it will force manufacturers and sellers to increase the share of electric cars, and Vietnam is also very interested in e-mobility.
Where are you looking for more options?
The whole of ASEAN (Southeast Asian countries, editor’s note) and the Middle East are interesting to us.
South and North America do not make sense for us, we can basically exclude them. Entering the markets there would be too expensive, and we don’t even have products suitable for those markets. We are also focusing on North Africa.
In Hradec, they opened one of the largest charging stations for electric cars in the country
European institutions have sanctioned the end of the production of internal combustion engines in 2035, is there still a chance to move this date due to the situation in Ukraine and the price of energy?
I think that rather not, the rhetoric is different in the European area. There, on the other hand, it is assumed that the conflict in Ukraine will accelerate the shift away from fossil fuels, the shift to CO2 neutrality and the transition to renewable sources. It is possible that in the short term more coal will be burned, there may be gas from Norway, Algeria or the United States, but rather the shift to renewable sources will strengthen.
What models do you expect in the coming years?
Next year we will present to the world completely new generations of Kodiaq and Superb cars, a year later we will show the Octavia facelift. But we will also launch electric models faster, in 2024 it will be an SUV smaller than the enyaq, followed in the next period by a car based on the Vision 7S study and a smaller car at the fabia or kamiq level, which will be priced below 25,000 euros. There will be more cars in the second half of the decade, but I can’t give any details here yet. We still want to have a portfolio in all segments, but we will gradually switch to electric cars.
The transition to the production of electric cars is associated with the modification of production halls and the relocation of lines, for example, according to some sources, Octavia production should be moved to Kvasin, and only electric models are to be produced in Mladá Boleslav. Is such a vision?
There are many variants, the discussions are not over yet, we are still evaluating when which models and platforms will be launched. There may be transfers, but we want to maintain maximum production capacity both in Kvasiny and in Mladá Boleslav. We will move from the production of components for cars with internal combustion engines to the production of components for electric cars, batteries, electric motors. We want to maintain the maximum production capacity, but whether a model will be produced here or in Kvasiny has not yet been finally decided.
Will there be further transfers of production abroad, as is supposed to be the case with the Superb from Kvasin to Bratislava?
Of course, this can happen, the market demand is greater than the volume of production in the Czech Republic. So if we want to sell more in Europe, we have to produce elsewhere. That’s why I don’t think it’s bad if the superb will be produced in Bratislava. It is okay if some Škoda models will be produced in other plants of the group, and other models of group brands will be produced here, as Seat is now produced here. It’s not a bad thing, it’s about optimal use of resources.
This is mainly about maintaining jobs, will they be preserved?
We do our best for it. However, the transformation of the automotive industry during the transition to the production of electric cars in the Czech Republic and throughout the world is massive. It would help us, for example, if a gigafactory for the production of battery cells of the VW concern was built in the Czech Republic. This would create well-valued and promising jobs and bring innovation here.
Gigafactory: the government is going to destroy the region
So can there be a reduction in the number of employees? If the plant were near Pilsen, it would not be very attractive for Boleslav employees.
There are no plans to reduce the number of employees. As for moving, people also gradually moved to Boleslav for work, but this certainly does not mean that half of Boleslav should move somewhere. We anticipate that some of the 4,000 potential employees will come from our existing plants.
It is important that total employment is maintained in the Czech Republic and that the added value remains. The added value brought in the Czech Republic may even increase, there will be demands for the development of electric cars, for the development and production of autonomous driving systems. If we grasp the transformation well, the Czechia can only profit from it.
The development of electromobility is linked to the development of a network of charging stations. Energy experts have published a study based on which we are doing better with the network than the European average. Isn’t it distorted?
We are doing well in terms of the number of charging points in relation to the number of electric cars in operation. Compared to Western Europe, there are significantly fewer electric cars in operation here. Here it is two percent of the market, in Germany it is around 14 percent thanks to state incentives. But there are countries where electric cars have a market share of 20, 30 or more percent.
It is important to have about 800 points of fast charging stations, which will help to cover longer distances, this could be in 2025 and will be crucial for further development. We have memorandums with state organizations that we can build charging stations at railway stations, at highway rest stops, so in 2025 the infrastructure should be sufficient. We see customers purchasing devices for recharging at home, while companies have recharging stations in their garages.
But a large part of the people live in apartment blocks, how will they solve it?
A solution will surely be found. Charging stations will be built in parking lots, there are pilot projects with charging from lamps, parking spaces will be roofed with photovoltaic panels, people will recharge at work, while shopping. Development and technology are progressing, the charging time will also be shortened. If we get under twenty minutes, it is not a problem to charge the car while shopping.
The range of cars will continue to be extended, while recharging, on the contrary, will be shortened, today it may seem utopian, but in five years we should progress by leaps and bounds.
Without chips and cards. All you have to do is connect the Skoda Enyaq to the charger