Is Skoda considering withdrawing from China? Why do we, who “understand Volkswagen”, no longer buy Skoda?

Skoda Auto, a Czech brand that once dominated the Chinese market, is now facing a difficult decision of whether to leave or stay.

According to media reports, Skoda CEO Klaus Zellmer said at a press conference recently that Skoda's new Kodiaq will not be launched in the Chinese market, and it is uncertain whether Skoda will withdraw from the Chinese market in the future.

This is not the first time such news has been reported.

As early as the end of 2022, more than one media reported that Klaus Zellmer expressed Skoda's intention to consider withdrawing from the Chinese market. In March this year, Skoda made it clear that it would shift its focus to the two major markets of ASEAN and the Middle East.

These plans and decisions of Skoda are not surprising. Data shows that Skoda's situation in China in the past two years is not optimistic. Last year, only 45,000 Skoda vehicles were insured, a sharp drop of 60.9% year-on-year. From January to August this year, only 15,000 vehicles were insured. It is almost certain that it will continue to decline, and it has completely become a marginal brand in the automotive industry. If we go back five or six years, Skoda's annual sales in China once exceeded 300,000 vehicles.

Time-Shifting Market It can be said that Skoda's product strength and brand strength have declined significantly, and its reputation among domestic consumers is no longer what it used to be. In addition, in the new energy era, even Volkswagen has fallen behind, let alone Skoda.

So, what exactly caused Skoda's difficulties in the Chinese market?

91car believes that there are mainly the following reasons:

First, the decline in product strength. Founded in 1895 and headquartered in the Czech Republic, Skoda is the third best-selling sub-brand of the Volkswagen Group after the Volkswagen brand and the Audi brand. In the course of more than 100 years of development, Skoda has launched many classic models, such as the Octavia, Superb, Fabia, Rapid, Rapid, Kodiaq, Kodiaq GT, Kamiq, Karoq, etc.

Among them, the Octavia is known as the "soul model" of "people who understand Volkswagen buy Skoda", and its 1.8TSI engine is the best engine to balance performance and fuel consumption. However, in the process of upgrading and replacing, Skoda has experienced reductions in configuration and quality problems. The Octavia cancelled the version of the 1.8TSI engine, and the Kodiaq was also exposed to have reduced configuration. These actions have disappointed and distrusted consumers, and greatly reduced Skoda's product strength.

Secondly, market competition has intensified. As a brand under the Volkswagen system, Skoda has formed cross-competition with the Volkswagen brand in the market competition, and there is no effective product differentiation between the two. Therefore, in 2019, the Volkswagen Group had to lower the positioning of its Skoda brand to avoid internal friction between its own brands, but this further damaged Skoda's brand power.

In addition, Skoda has actually never been good at marketing and brand building. It has always relied on cost-effectiveness to win, and has gained a lot of fans who focus on cost-effectiveness, but such fans have almost no brand loyalty. Now that domestic brands are rising, its brand appeal has naturally plummeted.

Finally, the market environment. In recent years, the Chinese auto market has experienced a transition from incremental to stock, and competition has become more intense. Domestic brands have quickly occupied the market with their advantages in high cost performance, low fuel consumption and exterior design. At the same time, the wave of new energy vehicles and smart cars has also swept in, bringing a huge impact on traditional cars. Skoda has not kept up with the pace in these aspects and cannot meet the diverse needs of consumers.

In summary, Skoda has encountered multiple difficulties in the Chinese market, and its withdrawal may be a helpless move. However, 91che also believes that Skoda is not without a chance to save the situation. If Skoda can speed up the research and development and launch of new energy vehicles and smart cars, improve product strength and brand strength, and regain consumers' trust and love, then it may be able to regain its glory in the Chinese market. However, the time left for Skoda is indeed running out.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.