Czech carmaker Skoda Auto AS is facing a fierce battle against South Korean carmaker Hyundai Motor Co. for cost-conscious consumers not only in its home country, but also in its home region. While Skoda is deeply entrenched in Czech Republic as a local carmaker, Hyundai has made the country its home base in Europe since 2008.
This rivalry is exemplified by an auto dealership ran by Jan Cervinka. The dealership used to sell Skoda vehicles, but it has been selling Hyundai units since 2012. "This is a never-ending fight for the customer," Cervinka told Bloomberg.
The Czech battle between Skoda and Hyundai is a big test of the South Korean carmaker’s ability to challenge a well-established local player, as it aims to increase its European market share from the current 3.4 percent to 5 percent later this decade.
It is also a big test for Skoda’s ability to stave off challenges on its home turf.
"It would be a huge loss of face for Skoda if Hyundai beat them in their home market," said Stefan Bratzel, director of the Center of Automotive Management at the University of Applied Sciences. He remarked that both Hyundai and Skoda have a similar position and “are fighting increasingly with the same means," including good quality at a reasonable price.
The challenge is right on Skoda’s throat as Hyundai has now become the second largest carmaker in the Czech Republic. Likewise, it is in this country that Hyundai has its largest market share compared to other countries in Europe.