Russian crisis may delay Skoda’s 1.5 million annual sales by a year

Article by Andrew Christian, on March 15, 2015

A current slump in the Russia auto market may delay by a year a target of Skoda to sell 1.5 million vehicles annually, sales chief Werner Eichhorn told Automotive News Europe. He said that Skoda still sees 2018 as the target year, adding that whether the carmaker achieves the goal a year later is not of vital importance.

He noted that profitable growth is crucial instead of buying market share. Carmakers sold 38 percent fewer vehicles in Russia in February to 128,298 units, and 32 percent fewer in the first two months of 2015 to 243,826, according to the Moscow-based Association of European Businesses said Tuesday. Skoda, meanwhile, sold 3 percent fewer vehicles in Russia to 10,743.

With this development, Eichhorn said the United Kingdom may well replace Russia this year as Skoda’s third-largest market, behind China and Germany. In 2014, Skoda posted a 3-percent drop in sales in Russia to less than 84,500 vehicles, but logged more than 14 percent jump to nearly 75,500 vehicles in the UK, according to industry data.

“We have seen Russia snap back before,” Eichhorn remarked. Since Russia usually generates almost a tenth of Skoda’s annual sakes, it is now unclear whether it can achieve an average sales growth of 9.6 percent annually needed to reach its 2018 target.

Skoda sold 12.7 percent more vehicles in 2014 to a record 1.04 million units and was bound to release its preliminary financial results on Thursday when its Volkswagen Group publishes its full-year results.

Skoda continues to perform well in China but is facing some challenges in India. China, India and Russia were expected to more than double their 2012 contribution to Skoda’s sales to around 810,000 units by 2018.

Topics: skoda, russia, sales

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