MLADÁ BOLESLAV, Czech Republic – Škoda Auto plans to take an equity interest in SAIC-Volkswagen, according to an MOU signed among Škoda Auto, parent company Volkswagen Group and Chinese partner SAIC Motor here on March 30.
The MOU was signed in the presence of visiting Chinese President Xi Jinping and his Czech counterpart Milos Zeman.
The equity stake will be subject to approval by the Chinese authorities and is part of the agreement that will see SAIC-Volkswagen invest around €2 billion over the next five years to expand Škoda’s model range in China and double sales to around 600,000 units. The investment also includes expenditures for pioneering electric drive concepts, the connectivity of Škoda cars to the Internet and the digitization of individual mobility.
Škoda is currently preparing a comprehensive SUV campaign for the Chinese market with SAIC-Volkswagen. The Škoda VisionS design study will make its Chinese debut in April at the Beijing Auto Show. It will provide a glimpse of the new large SUV model to be launched in China in the first half of 2017. As part of the SUV campaign, another body variant of Škoda’s large SUV is already in development. In addition, the brand intends to introduce a crossover utility vehicle (CUV) for China.
“Since entering the market nine years ago, Škoda Auto has made some very positive developments on the Chinese auto market, which has since become our largest single market,” said Škoda CEO Bernhard Maier. “We owe this success to our attractive model range and the very constructive and friendly cooperation with our longstanding Chinese partner SAIC-Volkswagen. With today’s agreement we’ll be strengthening our brand’s presence on the Chinese market. In the coming years, we’ll rapidly expand Škoda’s offering to include forward-looking vehicle concepts and modern technology.”
Commenting on the planned equity interest in SAIC-Volkswagen, Maier said: “We are pleased that we will be able to significantly strengthen our brand’s presence in the Chinese market through this interest in the JV. The equity interest in the company is the basis for the independent branding of Škoda cars and consequently the Škoda brand’s profiled staging in China.”
“With their passionate commitment to China, Škoda and the JV SAIC-Volkswagen play an important role in the Group’s strategy,” said Prof. Dr. Jochem Heizmann, Member of the Board of Volkswagen AG and President and CEO of the Volkswagen Group China.
Škoda launched vehicle production in China in mid-2007 at SAIC-Volkswagen with the Škoda Octavia. The millionth Škoda produced in China rolled off the production line in July 2013. Six different model series are currently built at SAIC-Volkswagen plants in Nanjing, Yizheng and Ningbo.
Since 2007, Škoda deliveries in China have increased from 27,300 to 281,700 vehicles in 2015, about a quarter of the brand’s total global sales. China has been the biggest market worldwide for Škoda since 2010. To date, the brand has sold over 1.7 million vehicles in China.