VW unit Skoda Auto cuts Octavia model production image

Czech car maker Skoda Auto AS, a unit of Volkswagen AG, is scaling back production of its Octavia sedan as of March 1 due to unfavorable market conditions, the company’s spokesman said Thursday.

“The market hasn’t developed as well as we had expected,” Jaroslav Cerny said, adding that the unusually snowy winter could be keeping potential buyers out of showroooms.

Skoda Auto will cut production of the car, which in 2009 was its best selling model, to 441 units daily from 574 units, he said.
The slowdown in sales follows Germany, Skoda Auto’s largest market, eliminating its car-scrapping subsidies in the autumn of last year.
Cerny said the decrease has been planned to start in March though the company was holding off from making a final decision until now in order to gear production levels as closely as possible to demand on the market.

“Together with this change we’ll decrease the number of agency workers and will shift some core workers from one position to another at the factory in Mlada Boleslav,” he said, adding that no core, company-employed laborers will lose their jobs.

Production levels can at a later date be adjusted based on changes in demand, Cerny added.

Dow jones