Automotive News Europe — 2023-10-11
Automotive Industry
Skoda will not sell its new Kodiaq midsize SUV in China in a possible sign that the brand is close to pulling out of the market.
At the Kodiaq's press launch, CEO Klaus Zellmer would not say whether the brand was leaving the Chinese market but confirmed that the second-generation Kodiaq will not be sold there.
"We are talking with our joint venture partner there, trying to define the future,” Zellmer told Automotive News Europe. "It's too early to draw final conclusions. It's a work in progress,” he added.
Automotive News Europe's sister publication Automobilwoche reported in December that Skoda could stop sales in China to allow parent Volkswagen Group to concentrate its efforts in the country on its main VW brand, which is struggling in the face of domestic competition.
The current Kodiaq formed a key part of Skoda's China lineup when the country was the brand’s No. 1 global market. Skoda' sales in China started to decline in 2019.
The brand's sales in China through August were 15,290 units, down 52% on the year before according to figures from sales aggregator Bestsellingcarsblog.com. In 2018, Skoda's China volume was 341,000.
In China, Skoda is partnered with SAIC Volkswagen Automotive, a joint venture between VW Group and SAIC.
SUV expansion
Skoda massively expanded its SUV lineup in China as sales of its traditionally popular sedans began to fade, and offered two versions of the Kodiaq, including a sportier GT model only sold in China. The brand also offered a GT version of the Kamiq small SUV, as well the compact Karoq. All the models are built in China in joint venture plants.
The Kamiq was the brand’s best-seller in China to the end of August, with 3,530 sales, down 49% on the year before, according to Bestsellingcarsblog.com.
Volume global automakers have struggled in China in recent years as local competition improves, particularly in electric vehicles. The tough competition has prompted Mitsubishi to exit the country, Japan’s Nikkei newspaper reported in September.
Focus on India
India is now Skoda’s biggest market outside Europe and the main focus of growth away from its core region. "India is probably 5-7 m new cars in the next five years," Zellmer said.
Skoda develops cars both for itself and VW in India, including the Kushaq small SUV and Slavia small sedan. Skoda also sells the current Kodiaq in India and will launch the new model there as well.
Zellmer hinted that Skoda’s next model for India could be an electric minicar. "“Over 50% of sales in India are sub four-meter and that is a spot we can look at," Zellmer said. "Then we have to look at the mid and long-term future because India is also moving to BEVs."
The brand is also looking to expand in Vietnam, for which it sees an annual sales potential of up to 40,000 vehicles, including cars built from completely knocked down (CKD) kits at a local factory due to open in 2024.