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Skoda strengthens China commitment

China Daily Updated: 2019-10-08

Czech automaker marking 70 years with strong engagement in country

One hundred and twenty four years ago, a bookseller in Mlada Boleslav, a small Bohemian town in today's Czech Republic, had been trying in vain for weeks to order parts to fix his bicycle.

Unable to get the manufacturer to send them, he decided to take matters into his own hands. Quitting the book business for good, he opened a bicycle repair shop with a friend.

They seized a business opportunity. From humble beginnings at the heart of Europe has come a globally successful automaker. Skoda is now one of the most visible Czech companies in the world.

Skoda China President Ralf Hanschen explains that electromobility, digitalization, and portfolio growth are the pillars of the company's investment plan. Photos Provided to China Daily

Skoda's rise coincided with a blossoming relationship between the Chinese and Czech peoples. Far from being a bystander, Skoda has played an active role in fostering engagement between the two countries over the past seven decades.

Early successes in China

As early as 1935, the Skoda Popular first made its way to China. Although economical for its time, the rear - wheel drive, two-door model's wind swept styling and body lines perfectly captured the zeitgeist of the 1930s.

As the dust settled at the end of World War II in 1945, the automaker spent several years rebuilding its manufacturing capabilities.

Soon, fate brought Skoda and China back together. In 1949, Czechoslovakia became one of the first countries to establish diplomatic relations with the government of the People's Republic of China.

Although then Czechoslovakia was still young itself, in the following decade, the two nations grew closer together as the Czech people made great efforts to support China.

In the early 1950s, the Czechoslovak government sent 670 agricultural vehicles and equipment along with many agricultural machinery experts who volunteered to go to China.

In May 1952, China and Czechoslovakia signed the Agreement on Science and Technology Cooperation - the first intergovernmental science and technology cooperation agreement signed by the People's Republic of China with any foreign country.

As China took its first steps toward car manufacturing, many experts from Czechoslovakia, including former Skoda chief engineer Oldrich Meduna, worked in China and taught at technical universities in Beijing, Changchun in Jilin province, and other cities. Thus, they helped to develop the Chinese automotive industry.

Skoda was especially honored in 1952 when the Czechoslovak government presented an executive car - a VOS - as a state gift to China's late Chairman Mao Zedong. The car is now on display at the military museum in Beijing.

The Czech carmaker's 706 RO became Beijing's main model of bus. The model was initially imported and later built in China in large quantities starting in 1954, and was the familiar face of public transport for two decades.

Return to the market

The year 2007 was momentous for Skoda as it started to localize its models in China through its partnership with SAIC Volkswagen. The first-ever Skoda car manufactured in China, the Octavia, was built that year. Within three years after starting local production, China became the largest single market for Skoda in 2010.

The automaker's triumphant return to the market seems fitting for a brand and a people that were among the first to offer their support to China after 1949.

So far, 2019 has been a banner year for Skoda with its brand turning 124 years old and its global bestseller Octavia celebrating its 60th anniversary. More than 1.3 million Chinese families have chosen an Octavia. Today, nearly one in every four Skoda cars sold worldwide is delivered to a Chinese customer - a symbolic threshold, and one that has underscored the market's importance to Skoda.

Expanding portfolio and major investments

Together with its joint venture partner SAIC Volkswagen, Skoda is in the process of investing 15 billion yuan ($2.11 billion) over five years to optimize its portfolio and better serve Chinese customers.

Speaking to China Daily, Skoda China President Ralf Hanschen said that electromobility, digitalization, and portfolio growth are the pillars of the company's global plan, dubbed "Strategy 2025".

On the basis of this strategy, the automaker is also expanding its offerings with solutions in new business segment such as digital mobility and connectivity services.

In terms of products, the automaker recently launched the new Superb in the market.

Its SUV campaign began in earnest in 2017 and 2018, with the Kodiaq, Karoq, Kamiq and a fourth coupe model - the Kodiaq GT - which launched at the Guangzhou Auto Show last year. All of the models are produced locally.

The automaker teased the Vision GT, an outlook for the production model Kamiq GT, the next member of its SUV family, at the Shenzhen-Hong Kong-Macao International Auto Show in June. "The Kamiq GT will be our next SUV in the market. China will be the only market where Skoda offers five SUVs," Hanschen said. "For us, China is the cornerstone of our growth strategy - it's a power house for all of the things that make up our brand.

"That's why, just a few months ago, we proudly opened Skoda Auto Digi-Lab in China - a new innovation center in Beijing," he said.

The company said the Skoda Digi Lab is a unique channel for the brand to connect with local talents and the Chinese startup community, adding that it is a place to rethink how owners use their cars.

It is looking at the future of mobility through "both radical innovation and simply clever design solutions that are already a hallmark of our brand," Hanschen added.

For the first period in the brand's long history, China is not only a symbolic overseas market: it is a key driver of global strategy.

With so many vehicles now being delivered here, local consumers' preferences and the market's advanced digitalization are playing a key role in how the automaker designs and manufactures.

Marking 70 years with strong engagement

For Skoda, 2019 will be remembered also for the important cultural and commercial engagements that it has been active in.

In late April, the company attended the second Belt& Road Forum as part of the national delegation of the Czech Republic, headed by Czech President Milos Zeman, and was showcased at the country's pavilion at the Beijing Horticultural Expo.

In July, with the popularity of winter sports growing fast in China ahead of the upcoming Winter Olympics in Beijing, Skoda offered its strong support to China's youth, extending its 27-year-long commitment to supporting ice hockey in China.

With a donation to the China National Sports Foundation, Skoda helped organize a youth ice hockey camp in August in 22 cities nationwide, promoting the sport to China's youth.

Despite a slowdown in China's automotive market, Skoda is optimistic for the future.

"We see China as a long-term growth market with huge potential," said Hanschen.

"Our commitment to the market runs deep. After 84 years of Skoda cars being present in China and 70 years of political relations between China and the Czech people, we are a brand that is committed to our customers in China in a deep and meaningful way," he said.

Skoda's classic and modern Octavia Combi models.