Skoda achieved a remarkable feat in 2023. Despite the challenging environment caused by the pandemic, the chip shortage, and the transition to electric vehicles, the company managed to increase its global deliveries by 18.5% year-over-year, reaching a total of 866,800 units.
This impressive result was driven by several factors, including the strong performance of its all-electric Enyaq family, the popularity of its Octavia, Kamiq, and Kodiaq models, and the expansion into new markets such as Vietnam and Kazakhstan. I will examine how Škoda Auto achieved this success and what challenges and opportunities lie ahead for the brand.
The rise of the Enyaq
One of the main drivers of Škoda Auto’s growth in 2023 was the Enyaq series, which consists of three all-electric models: the Enyaq iV, the Enyaq Sportline, and the Enyaq Coupé. The Enyaq series was launched in 2021 and has since become one of the best-selling EVs in many European markets.
According to the company’s press release, the Enyaq series set a new record since its launch, with 81,700 vehicles sold in 2023, representing a 52.1% increase over the previous year. The Enyaq topped EV sales in the Czech Republic and Slovakia and was among the best-selling EVs in other major European markets, including Germany, in October and November.
The Enyaq series offers a range of features that appeal to customers, such as:
- A spacious and comfortable interior with a high-quality design and materials
- A choice of battery sizes and power outputs, ranging from 52 kWh to 82 kWh and from 109 kW to 225 kW
- A fast-charging capability that allows the battery to be recharged from 10% to 80% in about 40 minutes
- A variety of driver assistance systems, such as adaptive cruise control, lane assist, and park assist
- A digital cockpit with a 13-inch touchscreen and wireless connectivity with smartphones and smartwatches
The Enyaq series also benefits from the European Union’s CO2 regulations, which require carmakers to lower their fleet emissions or face hefty fines. By offering an attractive and affordable EV option, Škoda Auto can meet the regulatory targets and avoid penalties, while also gaining a competitive edge in the growing EV market.
The popularity of the Octavia, Kamiq, and Kodiaq
Another factor that contributed to Skoda Auto’s success in 2023 was the popularity of its Octavia, Kamiq, and Kodiaq models, which are among the top sellers in their respective segments.
The Octavia, which is the company’s flagship model, remained the best-selling Škoda vehicle in 2023, with 248,300 units delivered, followed by the Kamiq, a compact SUV, with 155,900 units, and the Kodiaq, a mid-size SUV, with 115,600 units.
These models offer a combination of features that make them appealing to customers, such as:
- A spacious and versatile interior with a large boot capacity and foldable seats
- A choice of powertrains, including petrol, diesel, plug-in hybrid, and mild hybrid options
- A high level of safety and reliability, with a five-star rating from Euro NCAP and a seven-year warranty
- A modern and elegant design with LED headlights and taillights, a panoramic sunroof, and alloy wheels
- A competitive price, starting from $21,000 for the Octavia, $18,000 for the Kamiq, and $28,000 for the Kodiaq
These models also benefit from the strong demand for SUVs, the fastest-growing global car market segment. According to a report by JATO Dynamics, SUVs accounted for 42.5% of the total car sales in Europe in 2023, up from 39.7% in 2022. By offering a range of SUVs that cater to different customer needs and preferences, Škoda Auto can capitalize on this trend and increase its market share.
The expansion into new markets
A third factor that boosted Škoda Auto’s growth in 2023 was the expansion into new markets, such as Vietnam and Kazakhstan, as part of its internationalization strategy.
In Vietnam, Skoda Auto entered the market in July 2023, in partnership with THACO, a local automotive group. The company launched four models in the country: the Octavia, the Superb, the Karoq, and the Kodiaq. According to the company’s press release, the initial response from customers and media was very positive, and the company aims to establish a strong presence in the Vietnamese market, which has a population of nearly 100 million and a growing middle class.
In Kazakhstan, Skoda entered the market in October 2023 in partnership with Allure Group, a local automotive group. The company launched three models in the country: the Rapid, the Karoq, and the Kodiaq. According to the company’s press release, the launch event was attended by more than 300 guests, including government officials, business partners, and media representatives. The company plans to expand its product portfolio and dealer network in the Kazakh market, which has a population of over 18 million and a high demand for cars.
By expanding into new markets, Škoda Auto can increase its global reach and diversify its revenue streams, while also leveraging the synergies and economies of scale of the Volkswagen Group.
The challenges and opportunities ahead
Skoda Auto’s success in 2023 was not without challenges, and the company faces some uncertainties and risks in the future. Some of the main challenges and opportunities for the company are:
- The ongoing chip shortage has disrupted global car production and caused delays and cancellations of orders. Škoda Auto has been affected by this issue and has had to adjust its production plans and prioritize its most profitable models. The company expects the chip shortage to continue in 2024 and is working closely with its suppliers and partners to mitigate the impact and secure the supply of chips.
- The transition to electric vehicles requires massive research and development investments, infrastructure, and marketing. Škoda Auto has committed to launching six new all-electric models by 2030, and to achieving a 50% share of EVs in its European sales by 2030. The company also plans to invest $1.2 billion in its Czech plants to prepare them for EV production. The company faces competition from other carmakers, both established and new entrants, in the EV market, and needs to differentiate itself with its value proposition and brand identity.
- The changing customer behavior and expectations, which are influenced by the pandemic, the digitalization, and the environmental awareness. Škoda Auto has to adapt to the changing customer needs and preferences, such as the demand for online sales and services, the preference for subscription and leasing models, and the concern for sustainability and social responsibility. The company has to offer a seamless and personalized customer experience, and to communicate its values and vision to its stakeholders.
Skoda has proven its resilience and agility in 2023 and has demonstrated its ability to deliver high-quality and affordable vehicles to its customers. The company has a clear strategy and vision for the future and has the potential to become a leading player in the global car market. However, the company also faces some significant challenges and uncertainties and has to constantly innovate and improve to stay ahead of the competition and meet customer expectations.