Škoda profits climb for third record-breaking year in row

Photo: Škoda Auto

Škoda Auto has just enjoyed the most successful year in its history. The Czech-based carmaker saw its profits climb by just over a third in 2016 to reach CZK 25.7 billion. It was the third year in succession that Škoda, the country’s biggest exporter, made a new record profit.

Photo: Škoda Auto
At a news conference on Wednesday Škoda representatives announced a profit of CZK 25.7 billion last year, the Czech News Agency reported. Sales rose by 10 percent to a record CZK 370 billion.

Also up was the number of cars delivered to customers, which grew by 6.7 percent to 1,127,000. Sales in China swelled by 13 percent, while sales in Western Europe – which totaled 454,000 – increased by 5 percent.

Škoda chairman Bernhard Maier says the company, which is owned by Germany’s Volkswagen, expects to record even better sales numbers in 2017.

The carmaker attributes the growth in profit not only to the increased number of vehicles sold but also to higher utilisation of its production facilities, a better mix of models (thanks in large part to marked interest in the Superb) and the optimisation of production costs.

Bernhard Maier said the results for 2016 had outstripped Škoda’s expectations and confirmed the success of its growth strategy, which it would continue to implement in the coming years. The firm will renew and extend its range of models and focus on new markets and segments, he told reporters.

Škoda plans to launch its first purely battery-powered auto in 2020 but will present the concept for the electric vehicle at this year’s Shanghai motor show.

This year it will present 11 new models. An updated model of the Octavia has already been launched, as has the all-new Kodiaq SUV. Next up will be modernised models of the Citigo and Rapid and, in the second half of the year, a new generation of the Yeti. At present Škoda sells a total of seven models in 40 variations.

Analyst Radovan Hauk of the company BDO says Škoda’s excellent economic results are down to continued year-on-year growth in the production of new vehicles.

What’s more, he told the Czech News Agency, Škoda’s product mix is increasingly focused on segments with higher added value. This in turn boosts the company’s credibility, he said.

Last year Škoda’s workforce grew by 11 percent to just under 30,000. That is twice the number when it was bought by Volkswagen in 1991. Average wages have risen by 30 percent since 2010 and reached roughly CZK 36,000 in 2016.