The Czech automaker, one of the affordable brands that belong to the world’s second largest automaker – Volkswagen AG – predicts its 2018 sales goal could fall out of reach because of the Russian market’s huge decline.
Russia, a market that was once predicted to overcome Germany as the No. 1 auto market in Europe is now battling a severe slump – triggered by the declining local currency, decreased economy growth and the political tensions stemming from the Ukrainian conflict. According to the Volkswagen Group subsidiary, the brand also has a tough call on whether to lower the investment threshold in Russia – its third biggest market globally – in order to protect profitability. Russia’s ongoing conflict has attracted numerous economical sanctions from the Western nations, further deepening the economy freefall.
Also, Skoda’s targeted effort to secure sales of 1.5 million cars annually in 2018 could be further hampered by the continued decline in another strategic growth nation – India, where the European brand has been loosing market share. Werner Eichhorn, Skoda board member for sales and marketing, thinks Russia would see car sales this year slumping from the forecasted 3 million units to just 2 million autos, lowering in the process Skoda’s volume from the targeted 120,000 cars to just over 80,000 units.
Via Automotive News Europe