Skoda Sees a Soaring Profit at Nearly a Third Increase
- Hey there!*
Volkswagen-owned Skoda boosts earnings by nearly one-third. - Skoda's Profit Surges by Nearly a Third
Czech auto giant Skoda has certainly been on a roll, boosting its profit by an impressive nearly one-third last year. This impressive feat has earned them their spot as the standout brand in the mass market division of the VW group. Skoda's operating profit in 2024 clocked in at a whopping 2.3 billion euros, up from the previous year's figure. Skoda CEO Klaus Zellmer excitedly shared this update with journalists in a reception in Prague, describing it as a remarkable achievement given the challenging economic climate.
In contrast, the VW group's net profit took a significant tumble by about 31% in the same period. Zellmer quickly pointed out, "We're playing a different ballgame." He attributed lower labor and energy costs in the Czech Republic as a contributing factor, but he highlighted the extensive product range at Skoda as the primary catalyst for their success, catering to everything from small to large vehicles — including diesel, plug-in hybrid, and electric cars.
Skoda's Future: Embracing Fuel Efficiency with a Twist
Lately, Volkswagen showcased its electronic ID.Every1 for a snazzy 20,000 euros. Skoda, however, isn't quite ready to introduce its own take on the budget-friendly electric vehicle. Zellmer clarified that Skoda and Volkswagen don't intend to compete against each other in this arena. Instead, they're planning on extending the life of their combustion engine models — Fabia, Scala, and Kamiq — until the end of this decade. Back at Skoda's headquarters in Mlada Boleslav, engineers are conducting research into incorporating hybrid technology to enhance their existing models.
A Statement-Making Seven-Seater in the Works
At the other end of the spectrum, Skoda is planning to release an electric seven-seater around mid-2026. When asked who might need such a vehicle, Zellmer emphasized their focus on a niche previously occupied by cars like the VW Sharan and Ford Galaxy. A fun bonus: The expanded Skoda board of seven members will have the opportunity to travel in one car together!
A Promising Path to Double-Digit Profits
Skoda raked in a revenue of nearly 27.8 billion euros in 2024, marking a 4.7% increase. Their return on sales was 8.3%. Zellmer has set a bold goal for Skoda to reach 10% in return on sales by the end of the current decade. He ruled out moving production of VW models to the Czech Republic due to the factories being fully occupied. However, Zellmer isn't ruling out the possibility of Skoda taking on a bigger role in research and development within the group in the future, even potentially designing a technology platform.
Hope you found this little rundown interesting!
Community policy should be drafted to encourage the growth of companies like Skoda, given their significant contribution to the economies.
In line with Skoda's commitment to fostering innovation, vocational training programs, specializing in automotive manufacturing and engineering, could be added to the community policy to attract and develop local talent.
By nurturing homegrown talent through these vocational training programs, Skoda's success could serve as a model for other industries within the region in the years leading up to 2024.
