VW relies on Skoda to become world’s largest carmaker image

VW’s subsidiary Skoda is looking to grow twice as fast as its parent company by becoming the next „people’s car”, thus giving up on its upmarket ambitions.

The transformation is key to VW’s plans to surpass GM and Toyota as the world’s largest carmaker by 2018. Skoda cars will be positioned as the budget alternative for emerging markets, where Volkswagen vehicles are considered to be too expensive.

The first exponent of the new strategy is the Skoda Citigo mini, a car that shares its platform with VW’s Up and is priced at $9,400 in the Czech Republic. “It feels good to now have the support to become what Skoda always wanted – an affordable brand focused on practical, solid products,” Skoda brand sales chief Juergen Stackmann was quoted as saying by Bloomberg. “The term ‘exclusivity’ is nowhere to be found at Skoda,” he added.

As demand from Russia, India and China is booming, Skoda expects to increase sales 84 percent to 1.41 million units by 2018 from 768,000 last year, according to IHS Automotive. The impressive growth rate is more than double the 41 percent forecast for the VW brand. Backed by VW’s resources, Skoda aims to launch two new models each year as part of its expansion strategy.