Czech Please

Skoda, VW's Silver Lining

Produktion von Skoda Octavia in Tschechien
Skoda's factory in Mlada Boleslav is churning cars off the assembly line and making VW look better.
  • Why it matters

    Why it matters

    With Skoda leaving many respected German automakers in the dust, some argue that the Czech VW subsidiary deserves more attention. Others suggest that it’s time for a new, unsullied brand to be launched in the United States.

  • Facts

    Facts

    • Skoda posted operating margins of 9.6 percent for the first half of 2016.
    • That’s far better than parent company VW’s 1.7 percent.
    • Skoda is currently Volkswagen Group’s number two performer, behind only Porsche with its 16.7 percent return.
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  • Audio

    Audio

  • Pdf

When travelers arrive at the airport in Prague, it doesn’t take long for them to see which kind of car is the heart and soul of the Czech Republic. Skoda vehicles are on display at the arrival gates, the baggage claim and throughout the entire terminal. They include both the latest models off the production line and classics from years past.

The Czechs and Skoda are deeply linked. On the streets, this close relationship can be observed as well. Skoda has enjoyed a constant 30 percent market share in the region for 80 years, making every third car on the road one of the VW subsidiary’s. That’s something that Volkswagen has never achieved in Germany.

Around 60 kilometers northeast of Prague, the bond is even clearer in the small industrial town of Mlada Boleslav, home to Skoda’s headquarters. The town, with its 40,000 residents, is like a mini Wolfsburg, the home of VW. Mlada Boleslav is similarly dominated by a single large employer, with Skoda determining the cityscape with its large offices and research center. There is a separate Skoda University and a Skoda Vocational School. The lives of almost all of its citizens have something to do directly or indirectly with the automaker.

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