Once seen as the auto market to dethrone Germany as Europe’s largest, Russia is now the one to reshape strategies and expansion plans – and not to positive results.
The latest victim of Russia’s plunging auto market could be Volkswagen AG’s affordable Czech brand Skoda. According to the company’s sales chief Werner Eichhorn, the current 2018 sales goal might have to be refreshed and a year added to the deadline. Russia’s slumping economy has barred auto sales in the region, threatening Skoda’s delivery mark of 1.5 million vehicles each year by 2018. “The target still stands, but whether we reach it one year later is not of vital importance. Profitable growth is crucial. We are not going to buy market share,” commented Eichhorn. In Russia just last month deliveries of new cars plummeted 38 percent to 128,298 units and after the first two months the auto market nosedived 32 percent to 243,826 vehicles, according to data coming from Moscow-based Association of European Businesses.
After January and February, Skoda’s Russian sales were down 3 percent from the same period of 2014, to 10,743 autos, with the brand the eighth-biggest on the market. “The UK may well replace Russia this year as our third-largest market,” added the executive. The first two markets of the brand are China and Germany. The 2018 milestone has Skoda in need of adding almost 10 percent larger sales each year for the period – but giving that Russia accounts for around a tenth of the final quota the mark could be harder to achieve than previously envisioned.
Via Automotive News Europe