Skoda to Play 'Key Role' for VW

German carmaker Volkswagen Group expects its Czech arm Skoda to form a backbone for its China operations along with the Volkswagen and Audi brands.

By introducing Skoda cars to China, "we will have three legs to make the table stable" in the world's third-largest vehicle market, said Winfried Vahland, executive vice-president of Volkswagen Group and chief executive officer of Volkswagen Group China.

According to a deal struck earlier this year, Volkswagen's joint venture with Shanghai Automotive Industry Corp (SAIC) one of China's biggest vehicle manufacturers will start producing Skoda cars at the beginning of next year.

The Shanghai-based venture is now making Volkswagen-branded cars.

Volkswagen Group also runs a joint venture with First Automotive Works Corp in Changchun, the capital of Northeast China's Jilin Province, which produces Volkswagen and Audi-branded cars.

"Volkswagen is a market leader in China. Skoda will help to strengthen its position," said Vahland, the former vice-chairman of Skoda, who added that the introduction of the Czech brand to China would be an integral part of the Volkswagen Group's "Olympic Program."

According to the program, Volkswagen will launch 12 to 14 new models in China by 2009, including Skoda's Octavia compact sedan, the Superb mid-sized sedan and the Fabia sub-compact car.

Skoda board member Martin Jahn said the brand aims to secure a 3 percent share of China's passenger car market. "We don't want to be a small player in China," insisted Jahn.

Vahland said Skoda will have a clear product positioning setting it apart from all of the current products of Volkswagen Group's two ventures in China. This is vital in order to avoid overlapping and fully satisfy increasingly diversified customer demand, he said.

"Skoda will offer products with innovative design, spacious room, practical multi-function performance and elegant style to intelligent consumers who enjoy their life and prefer high efficiency," he added.

Shanghai Volkswagen said Skoda will have 80 exclusive dealerships in China next year.

Volkswagen Group's China sales jumped 30.2 percent year-on-year to 345,375 units in the first half of 2006, grabbing 17.3 percent of China's passenger car market.

(China Daily September 26, 2006)