Skoda Expects Growth in 2014 after Last Year Profit Drop image

Skoda, Volkswagen’s Czech unit, expects this year to bring a return in profitability and vehicle sales as many markets show signs of recovery and orders keep piling up.

Skoda, which reported a drop of 25.5 percent in the 2013 profit, relies on its newly launched models to help the company reach its target of selling 1.5 million vehicles per year by 2018 and 1 million units by the end of this year. Last year new vehicle sales fell 2 percent to 920,800 units.

“It was a pleasing start to the year, a good level of orders and ever-more positive signals from markets convinces us that we will be able to continue in growth this year,” Skoda CEO Winfried Vahland said in a statement.

During the first six months of 2013, Skoda’s sales have been affected by a model switch over to the new version of the Octavia compact. Still, sales managed to recover as production has been increased to deal with a backlog of orders. During the first month of 2014 sales increased 16.5% and 4.5% in the following month, helping Skoda reach the best start of the year in the company’s history.

Volkswagen plans to become the biggest automaker  in the world by 2018 and the success of its mass-market brands, such as Skoda, its core VW cars and Seat, is of utmost importance to reach this target. Although last year vehicle sales have been affected by the financial crisis inEurope, Skoda still managed to grow in the old continent.

“Europeis and will stay our main market. The goal is to increase our market share in Europe to more than 5 percent, currently we have over 4 percent,” Vahland said.