Škoda Auto
Škoda Auto a.s., often shortened to Škoda, is a Czech automobile manufacturer established in 1925 as the successor to Laurin & Klement and headquartered in Mladá Boleslav, Czech Republic. Škoda Works became state owned in 1948. After the Velvet Revolution, it was gradually privatized starting in 1991, eventually becoming a wholly owned subsidiary of the German multinational conglomerate Volkswagen Group in 2000.
Škoda automobiles are sold in over 100 countries, and in 2018, total global sales reached 1.25 million units, an increase of 4.4% from the previous year. The operating profit was €1.6 billion in 2017, an increase of 34.6% over the previous year. As of 2017, Škoda's profit margin was the second-highest of all Volkswagen AG brands after Porsche.
Its slogan is “Simply Clever”.
History
The Škoda Works was founded by Czech engineer Emil von Škoda in 1859 in Plzeň, then in the Kingdom of Bohemia in the Austrian Empire, and was originally an arms manufacturer. It was one of the largest European industrial conglomerates in the 20th century, and is the predecessor of today's Škoda Auto, Doosan Škoda Power, and Škoda Transportation companies. Although Škoda is named after its founder, the word "škoda" also means "pity" or "shame" in Czech.Laurin & Klement
As with many long-established car manufacturers, the company that became Škoda Auto started by manufacturing bicycles. Škoda was founded in 1896 as a velocipede manufacturer.In, 26-year-old Václav Klement, who was a bookseller in Mladá Boleslav, Kingdom of Bohemia, was unable to obtain spare parts to repair his German bicycle. Klement returned his bicycle to the manufacturers, Seidel and Naumann, with a letter, in Czech, asking them to carry out repairs, only to receive a reply, in German: "If you want us to answer you, we insist that you convey your message in a language we understand." Not satisfied with the reply and realizing the business potential, Klement, despite having no technical experience, decided to start a bicycle repair shop, which he and Václav Laurin opened in 1896 in Mladá Boleslav. Before going into partnership with Klement, Laurin had been an established bicycle manufacturer in the nearby town of Turnov.
In 1898, after moving to their newly built factory, the pair bought a Werner "Motocyclette". Laurin & Klement's first motorcyclette, powered by an engine mounted on the handlebars driving the front wheels, proved dangerous and unreliable – an early accident on it cost Laurin a front tooth. To design a safer machine with its structure around the engine, the pair wrote to German ignition specialist Robert Bosch for advice on a different electromagnetic system. Their new Slavia motorcycle made its debut in 1899, and the company became the first motorcycle factory in Central Europe. In 1900, with a company workforce of 32, Slavia exports began and 150 machines were shipped to London for the Hewtson firm. Shortly afterwards, the press credited them as makers of the first motorcycle.
By 1905, the firm was manufacturing automobiles, making it the second-oldest car manufacturer in the Czech lands after Tatra. The company, with an area of, had a workforce of 320 and used 170 special machine tools, power-driven by of steam power. The first model, Voiturette A, was a success, and the company was established both within Austria-Hungary and internationally.
Škoda
After World War I, the Laurin & Klement company began producing trucks, but in 1924, after running into problems and being affected by a fire on their premises, the company sought a new partner.Meanwhile, Akciová společnost, dříve Škodovy závody, an arms manufacturer and multisector concern in Plzeň, which had become one of the largest industrial enterprises in Europe and the largest in Czechoslovakia, sought to enlarge its non-arms-manufacturing base, so it acquired Laurin & Klement in 1925. It also started manufacturing cars in cooperation with Hispano-Suiza. Most of the later production took place under Škoda's name.
An assembly line was used for production from 1930 onwards. Also in 1930, a formal spin-off of the car became a new company, Akciová společnost pro automobilový průmysl or abbreviated ASAP, happened. ASAP remained a wholly owned subsidiary of the Škoda Works, and continued to sell cars under the Škoda marque. Apart from the factory in Mladá Boleslav, it also included the firm's representation, sales offices, and services, as well as a central workshop in Prague. At the time, the car factory in Mladá Boleslav covered an area of 215,000 m2 and employed 3,750 blue-collar and 500 white-collar workers.
In 1932, ASAP-Škoda in Mladá Boleslav, Bohemia, produced a type Škoda 932 prototype of a streamlined 4-seater two-door car with a rear air-cooled flat-four engine designed by Karel Hrdlička and Vsevold Korolkov. This car's bodywork closely resembled the small car designs yet to come.
After a decline caused by the economic depression, Škoda introduced a new line of cars in the 1930s, which significantly differed from its previous products. A new design of chassis with backbone tube and all-around independent suspension was developed under the leadership of chief engineer Vladimír Matouš and modelled on the one first introduced by Hans Ledwinka in Tatra. First used on model Škoda 420 Standard in 1933, it aimed at solving the insufficient torsional stiffness of the ladder frame.
The new design of chassis became the basis for models Popular, Rapid, Favorit, and Superb. While in 1933 Škoda had a 14% share of the Czechoslovak car market and occupied third place behind Praga and Tatra, the new line made it a market leader by 1936, with a 39% share in 1938.
World War II
During the occupation of Czechoslovakia in World War II, the Škoda Works were turned into part of the Reichswerke Hermann Göring serving the Nazi German war effort by producing components for military terrain vehicles, military planes, other weapons components, and cartridge cases. Vehicle output decreased from 7,052 in 1939 to 683 in 1944, of which only 35 were passenger cars. Between January and May 1945, 316 trucks were produced. The UK and US air forces bombed the Škoda works repeatedly between 1940 and 1945. The final massive air raid took place on 25 April 1945, and resulted in the near-complete destruction of the Škoda armament works and about 1,000 dead or wounded.Post World War II
When, by July 1945, the Mladá Boleslav factory had been reconstructed, production of Škoda's first post-World War II car, the 1101 series, began. It was essentially an updated version of the pre-World War II Škoda Popular. In the autumn of 1948, Škoda became part of the communist planned economy, which meant it was separated from the parent company, Škoda Works. Despite unfavourable political conditions and losing contact with technical development in noncommunist countries, Škoda retained a good reputation until the 1960s, producing models such as the Škoda 440 Spartak, 445 Octavia, Felicia, and Škoda 1000 MB.Starting in 1957, the Škoda Octavia, and later the Felicia, were imported to the United States amid a wave of new imports as some American consumers sought out cars smaller than typical Detroit offerings. Škoda’s American dealerships, concentrated on the West Coast and in the Northeast, quickly encountered buyer resistance due to the Cold War political climate in ways that comparable Western European cars did not. The cars were also not well supported after sale, making even minor repairs difficult. U.S. sales peaked in 1959 but fell sharply after 1960, and many were sold at steep discounts. A few later cars, including 1000MB models, were sold in the U.S. as late as 1966-67, but in very small numbers. Škoda has not sold vehicles in the U.S. since then, but did sell cars in Canada from 1984 to 1990.
In the late 1980s, Škoda was still manufacturing cars that conceptually dated back to the 1960s, and in Western Europe at least, were aimed squarely at the budget end of the market. Rear-engined models such as the Škoda 105/120 and Rapid sold steadily and performed well against more modern makes in races such as the RAC Rally in the 1970s and 1980s. They won their class in the RAC rally for 17 years running. They were powered by a, engine. –Škodas remained a common sight on the roads of the United Kingdom and Western Europe throughout the 1970s and 1980s.
Sport versions of the Estelle and earlier models were produced, using the name "Rapid". Soft-top versions were also available. The Rapid was once described as the "poor man's Porsche", and had significant sales success in the UK during the 1980s.
In 1987, the Favorit was introduced, and was one of a trio of compact front-wheel drive hatchbacks from the three main Eastern Bloc manufacturers around that time, the others being VAZ's Lada Samara and Zastava's Yugo Sana. The Favorit's appearance was the work of Italian design company Bertone. With some motor technology licensed from Western Europe, but still using the Škoda-designed 1289 cc engine, Škoda engineers designed a car comparable to Western production. The technological gap still existed, but began closing rapidly. The Favorit was very popular in Czechoslovakia and other Eastern Bloc countries. It also sold well in Western Europe, especially in the UK and Denmark, due to its low price, and was regarded as solid and reliable. However, it was perceived as having poor value compared with contemporary Western European designs. The Favorit's trim levels were improved, and it continued to be sold until the introduction of the Felicia in 1994.
Volkswagen Group subsidiary
Until 1990, Škoda was still making its outdated range of rear-engined small family cars, although it had started production of the Favorit front-wheel drive hatchback in 1987 as an eventual replacement.The fall of communism with the Velvet Revolution brought great changes to Czechoslovakia, and most industries were subject to privatization. In the case of Škoda Automobile, the state authorities brought in a strong foreign partner. The tender for privatization was announced in 1990; 24 different companies were registered for the tender, while only eight of them expressed a serious interest – BMW, GM, Renault, Volvo, Volkswagen, Ford, Fiat, and Mercedes-Benz. In August 1990, VW and Renault were on the shortlist. Renault first offered to terminate Favorit production and replace it with the outdated Renault 18 derivative and new Renault Twingo, which would have eliminated the Škoda brand. This offer was declined, and Renault prepared a new one. They offered a 60:40 joint venture, while Škoda Favorit production was to be retained and produced side by side with the Renault 19, and producing engine units, gearboxes, and other components for Renault. Total investment would have been US$2.6 billion.
Volkswagen offered to continue Favorit production and preserve the Škoda brand, including retention of research and development. Volkswagen offered a purchase of 30% Škoda share, gradually increasing to 70%. Volkswagen's total investment would have been US$6.6 billion by 2000. The government inclined on the Renault side, while the Škoda trade union preferred VW, because it offered significantly larger potential for development of the company.
Volkswagen was chosen by the Czech government on 9 December 1990, and as a result, on 28 March 1991 a joint-venture partnership agreement with Volkswagen took place, marked by the transfer of a 30% share to the Volkswagen Group on 16 April 1991, raised later on 19 December 1994 to 60.3% and the year after, on 11 December 1995, to 70% of its shares, to make VW the largest and controlling shareholder of Škoda. On 30 May 2000, Volkswagen AG bought the remaining 30% of the company, thus making Škoda Auto a wholly owned subsidiary of the group. Backed by Volkswagen Group expertise and investments, the design–both style and engineering–has improved greatly. The 1994 model Felicia was effectively a reskin of the Favorit, but quality and equipment improvements helped, and in the Czech Republic, the car was perceived as a good value for money and became popular. Sales improved across Europe, including the United Kingdom, where the Felicia was one of the highest-ranking cars in customer satisfaction surveys.
Volkswagen AG chairman Ferdinand Piëch personally chose Dirk van Braeckel as head of design, and the subsequent Octavia and Fabia models made their way to the demanding European Union markets. They are built on common Volkswagen Group floorpans. The Fabia, launched at the end of 1999, formed the basis for later versions of the Volkswagen Polo and SEAT Ibiza, while the Octavia, launched in 1996, has shared its floorpan with a host of cars, the most popular of which is the Volkswagen Golf Mk4.
The perception of Škoda in Western Europe has completely changed since the takeover by VW, in stark comparison with the reputation of the cars throughout the 1980s described by some as "the laughing stock" of the automotive world. As technical development progressed and attractive new models were marketed, Škoda's image was initially slow to improve. In the UK, a major change was achieved with the ironic "It is a Škoda, honest" campaign, which began in 2000 when the Fabia was launched. In a 2003 advertisement on British television, a new employee on the production line is fitting Škoda badges on the car bonnets. When some attractive-looking cars come along, he stands back, not fitting the badge, since they look so good they "cannot be Škodas". This market campaign worked by confronting Škoda's image problem head-on – a tactic which marketing professionals regarded as high risk. By 2005, Škoda was selling over 30,000 cars a year in the UK, a market share of over 1%. For the first time in its UK history, a waiting list developed for deliveries from Škoda. UK owners have consistently ranked the brand at or near the top of customer-satisfaction surveys since the late 1990s.
In 1991, Škoda built 172,000 units, exporting 26% of its production to 30 countries, while in 2000, it built 435,000 units, exporting 82% of its production to 72 countries.