Skoda is having a hard time building enough cars – except, perhaps, for New Zealand. We’re in the good books with this brand.
STRONG and fast-paced growth by Skoda in this market means we might expect a special protection for product supply at a time when the brand is losing its fight to meet global demand.
This suggestion today from David Palm (pictured), a high-up based at the company headquarters in Mlada Boleslav, in the Czech Republic, who has responsibility for New Zealand and is visiting for the release of the marque’s new Karoq small sports utility (the blue car).
Skoda NZ has identified that the compact model is especially important, and will likely overtake its only other SUV, the next-size-up Kodiaq introduced last year, as its top seller here.
The Kodiaq has been an instant success locally, tapping into the massive swell in SUV interest and winning local plaudits, including the New Zealand Car of the Year in 2017, and also drawing in new customers – 72 percent of buyers are fresh to Skoda.
Skoda NZ wants to build up that momentum all the more but has acknowledged that supply of the key product has begun to be an issue.
Local brand boss Greg Leet has suggested he will not be able to secure more than 500 examples of the Karoq this year, a time when it is aiming to achieve 1800 range-wide registrations and is riding high on the back of massive interest in SUVs.
He’s thankful the factory seems to be paying special attention to its farthest-flung, and fastest-growing outpost: Just two weeks ago Leet learned of a nice windfall, with head office allowing him 250 more SUVs this year than he’d planned for.
He says this is a reflection of the marque’s owner being highly impressed by how well the local distributor has done re-instating the brand.
“They’re really on our side. They’ve taken note of what we are doing and are being really helpful when they can. They also like the Kiwi way of doing things – they appreciate that we think the same way they do.”
Nonetheless Skoda itself has acknowledged it needs to step up. It is in a period of record-breaking sales everywhere and needs to build more cars.
Two weeks ago chief executive Bernhard Maier said Skoda may need to build another plant in Europe or at least shift output to factories within parent Volkswagen Group's European network.
Either way the two existing factories in the Czech Republic are at optimum, with three shifts a day, yet still over-stretched.
He lamented that “delivery times today are too long, sometimes eight to 10 months for some markets.”
Skoda built 858,103 cars last year at its Czech plants, up 12 percent on the year before, as global sales reached a new record of 1.2 million vehicles.
It will need even more European capacity once its third SUV, a subcompact-sized model based on the Vision X concept, arrives in 2019.
That model is keenly awaited by Skoda NZ, which sees a huge future in off-seal models, at least until it – and this market – is ready for the electric vehicles also under development, for release in 2020.
Palm said the NZ market resurgence for Skoda so far has been amazing.
“I have to say the performance here is so incredible. The growth achieved within the last two years is fantastic … you have come from a few hundred cars to looking at 1800 units this year; it is really incredible.
“The whole co-operation between the brand and the team here is so much closer than in some European markets. We are really proud of all these achievements.”
Further, he said, the rate of growth and the manner in which Skoda NZ, a non-factory operation that is part of the Giltrap Group, had re-engaged with New Zealand motorists was the envy of some other markets, not least Australia, which is also under his remit.
“They are a bigger market but they are now looking at New Zealand and saying ‘I really like that solution, I think we should do that too.’
“Skoda in New Zealand is really well-managed and Karoq is the most important car that we have launched.”
Leet notes that the Kiwi enthusiasm for crossovers and SUVs has and will continue to be great for his brand. The type accounts for 65 percent of new vehicle registrations here presently whereas the take-up rate in Europe is 25 percent.
Kodiaq’s imprint has been huge, not just in terms of sales but also in raising Skoda’s image and remedying impression that it was somehow a less than modern brand.
“What it has done to put Skoda on the map … there would not be that many people who wouldn’t know Kodiaq … Karoq is an extension of that SUV strategy.”
He reiterates that regardless of the prestige image that ownership by VW (and association with sister brands Audfi, VW and Seat) provided, Skoda was a mainstream brand competing in a mainstream market.
“Our competitors are Hyundai, Suzuki, Mazda … that’s the segment in which we are competing in. It’s really easy to compare us to our brother and sister brands but, actually, that’s not where we focus. Our focus is in that mainstream environment.”
In addition to launching the Karoq, in front-drive 1.5-litre petrol and 2.0-litre four-wheel-drive diesel formats, Skoda here is releasing its latest elevated Scout edition of the Octavia wagon plus a re-jigged Rapid.