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VW Ponders a New Factory for Skoda Brand
Volkswagen AG is looking for ways to hike production for its hot-selling Skoda brand, including building a new assembly plant, sources tell Reuters.
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Volkswagen AG is looking for ways to hike production for its hot-selling Skoda brand, including building a new assembly plant, sources tell Reuters.
VW has been trying to increase output by adding shifts and operating on Saturdays at Skoda’s factory in Mlada Boleslav, Czech Republic. The facility has been operating at full capacity for years. But the company’s union opposes the moves, which the company says would create 3,000 jobs.
Skoda’s sales have surged by nearly one-third in the past five years to a record 1.2 million units in 2017. Growth has been driven by strong demand in China and Europe, especially for the brand’s low-priced SUV/crossover vehicles.
The company says additional capacity is “absolutely essential” to meet growing demand. Reuters’ sources estimate that a lack of new capacity could cost Skoda 360,000 sales by 2020.
Whether other VW Group operations have capacity to spare isn’t clear. Another option would be to build a new assembly plant outside the Czech Republic that other VW units could share. Reuters’ sources say VW and Skoda aim to find a solution by this summer.
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