India’s Strategic Importance in Skoda’s globalization
Skoda Auto has reasserted India’s strategic position in its global strategy for expansion, with the country as an export platform. Skoda will be shipping Completely Knocked Down (CKD) kits from India to Vietnam, which is a strategic gateway to the larger ASEAN market. This follows Skoda’s ambitions to lead the Volkswagen Group’s Brand Group Volume in ASEAN and drive growth in the Middle East.
As a part of its internationalization drive, Skoda Auto selected India as one of its primary export markets in ASEAN and the Middle East. In 2023, the organization began operations in Vietnam with Completely Built Units (CBU) sourced from India. Skoda, in the coming future, will begin manufacturing cars in Vietnam by 2025 in its new Quang Ninh province factory. It will begin manufacturing the Kushaq, followed by the Slavia, from CKD kits sourced from India. This is a landmark in India emerging as a central export hub for Skoda’s global supply chain.
Outside ASEAN, Skoda Auto is expanding its footprint in other markets. Skoda Auto returned to the Kazakhstani market and had a successful outing, selling over 1,400 vehicles to customers during 2024, further solidifying its footprint globally.
Skoda Increased Commitment to the Indian Market
Skoda Auto has reasserted its faith in the Indian market with the launch of the Skoda Kylaq in the first half of this year. The Kylaq is the auto maker’s largest bet in India so far, and it is entering the very competitive sub-four-metre segment, which sells nearly 50% of vehicles in India. The car is expected to be one of the pillars of Skoda’s ambition to sell 100,000 units in India every year by 2026.
The Kylaq is the third product of Skoda’s India 2.0 strategy. In a previous interview to HT Auto, Piyush Arora had stated that Kushaq and Slavia had already enabled Skoda to tap approximately 30% of the Indian passenger car market. With the Kylaq, the company is attempting to push its footprint further into Tier-2 and Tier-3 cities and increase its market penetration in non-metros.
The growth plan also includes an enhanced dealership network to expand reach. The Kylaq will act as a launchpad for Skoda to propel its premium offerings, including the upcoming Kodiaq, in small city markets. The initiative is a part of Skoda’s broader plan to expand its reach in different consumer segments in India.
Skoda’s Record-Setting Performance in 2024
Skoda Auto posted its best ever financial year in 2024 with highest ever sales revenue of approximately $30.36 billion (€27.8 billion), 4.7% higher than the previous year. The company’s operating profit rose 30% to approximately $2.51 billion (€2.3 billion), while net cash flow rose more than two times to surpass $2.18 billion (€2 billion), a 116.2% rise from the previous year. The return on sales was 8.4%, which speaks volumes about the financial strength and stability of Skoda.
In the first half of 2024, Skoda Auto’s operating profit increased to €1.149 billion, representing a 26.1% growth compared to the same period in the previous year. The company’s return on sales also increased to 8.4% from 6.6%.
In 2024, Skoda Auto sold 926,600 vehicles worldwide, an increase of 6.9% annually. The company’s flagship, the Skoda Octavia, sold 215,700 units—a whopping 12.4% increase. The company also recorded a tremendous boost from the European market, advancing from the seventh to the fourth-best-seller carmaker status, outpacing the growth of the entire market.
Skoda’s Future Outlook and Innovation
With its most technologically sophisticated and diversified product lineup ever, Skoda Auto is set to build on its success. Skoda is adding to its electric vehicle (EV) product range with the new all-electric compact SUV, Elroq, and the new-generation Enyaq. With an emphasis on innovation, sustainability, and expansion in the market, Skoda is set to ride its momentum and establish itself as one of the world’s leading automobile producers within the next three years.
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