30 years since Škoda-Volkswagen merger

April 16 marks the 30 year anniversary of Czech car manufacturer Škoda Auto becoming part of Volkswagen Group. Since then, Škoda has become one of Volkswagen’s most successful brands, active in over 100 countries and producing over a million cars a year.

40 years of Communist rule, followed by sudden and wide-ranging economic and political change in the aftermath of the Velvet Revolution, left Škoda in debt and unable to seriously compete with major Western car manufacturers.

Nevertheless, Škoda was still seen as a "pearl among Eastern European car manufacturers", as the German daily Süddeutche Zeitung wrote in 1990, and there were many partnership offers from Western automobile giants.

Photo: Škoda Auto

In December 1990, the Czechoslovak government, under the leadership of Petr Pithart, decided to accept the offer of Volkswagen Group.

The merger was finalised on April 16, 1991, when Volkswagen acquired a 30 percent stake in Škoda Auto. The Czech car manufacturer thus became the fourth brand in the Volkswagen Group fleet of cars, which also included Audi and Seat.

In the subsequent 30 years since the merger took place, Škoda has become not just one of the most profitable of the Volkswagen brands, but also one of the main drivers of the Czech economy.

Production has multiplied by a factor of six since 1991, with Škoda regularly producing over a million cars annually since 2014. While still based primarily in the Czech Republic, Škoda has also seen its factories expand to China, Slovakia, India, Ukraine and Russia.

The success of Škoda has been so significant in fact that members of its trade unions have become concerned in recent years, about whether Volkswagen is trying to change Škoda’s car designs to fit the cheaper segment of its portfolio in order not to threaten the sales of the German brand’s cars. However, this has been denied by both the Volkswagen and Škoda leadership.

Photo: Nadeem Ahmed,  Pixabay,  CC0 1.0 DEED

Journalist David Šprincl of car magazine Svět motorů also told Czech Radio that fears of Škoda being merely an assembly plant of Volkswagen are unfounded.

“Škoda has managed to maintain a different approach. It has managed to introduce smartness, when it comes to all the elements included in the cars. It’s also been visible for decades at Ice Hockey World Championships and at the Tour de France – and does so independently. Volkswagen definitely didn’t turn it into an assembly plant, as was feared. Rather it is building on its good image, which is different from that of other brands.”

Škoda is currently also undergoing the electrification of its portfolio and has managed to tackle the fallout of the coronavirus pandemic with relative success.

Škoda CEO Thomas Schäfer said at the company’s recent annual press conference that 2020 also saw Škoda expand its position in the European car market.

“We delivered more than 1,000,000 vehicles worldwide for the seventh year in a row despite the pandemic. Our share of the European car market increased by 0.5 percentage points to 5.4 percent. In other words, Škoda has further strengthened its position as one of the leading brands in the volume sector.”