Skoda forced to scale down its production image

VW’s Czech brand, Skoda, plans to reduce its production capacity at the end of the year, a local newspaper recently reported.

The Skoda brand has always been well received in the Eastern Europe countries, but reports are lately indicating a decrease in demand in the region, leading to a slower growth pace in those auto markets. According to the Czech newspaper Mlada Fronta Dnes, this not-so-encouraging situation is forcing Skoda to take some drastic measures to cut costs. Therefore, the automaker plans to scale down its production capacity by reducing work shifts and not holding Saturday shifts as in previous years, the paper reported. The shift reduction will involve cancelling more than three shifts on the Fabia and Rapid production lines in November, the paper said, with yet unknown effects on Skoda’s total output for this year. A company’s spokeswoman told the newspaper negotiations were under way and that the company would not comment before the talks were concluded.

Skoda’s October sales report indicated that global vehicle deliveries fell 2.7 percent to 85,000 in October, from 91,000 units in the similar period of 2014, as deliveries on the Russian market were 38 percent down. In Western Europe, Skoda sales dropped 1.9 percent, while the brand’s volume in its Eastern European markets, excluding Russia, was down 11 percent. Skoda’s 10-month sales still rose 1,7 percent to 880,000, Octavia being its most successful model with 37,000 units sold in October. The Czech brand joined forces with the Volkswagen Group in 1991 and the company sold more than 1 million cars for the first time in 2014.

Via Reuters