VW unions afraid of Skoda’s success
Volkswagen and Skoda are entering into a debate about the positioning of the brands. While Volkswagen has – after the dieselgate affair – a margin of profit of 1,8%, Skoda makes a profit margin of 8,7% thanks to Volkswagen technology. The German unions are furious.
Besides Porsche, Skoda is nowadays the most successful brand of the Volkswagen Group before Audi and VW. Skoda was bought by the Volkswagen Group 26 years ago and has become a serious player selling decent family cars at a reasonable price.
Thanks to VW technology
Skoda is able to build cars with VW-technology at a lower price compared to Volkswagen. According to the VW-unions this is caused by the lower wages of the co-workers. A German worker costs 38,70 euro an hour, a Czech employee costs only 10,10 euro an hour. That’s why the union asks to make Skoda pay a higher price for the German technology and they also want the Skoda production moves over to Germany. In the end the Skoda customer should pay the difference and Volkswagen will become more attractive again.
The Skoda representative (he is also German) already made clear that the production won’t move to Germany, unless to compensate for production peaks. Also the spokesman for the Volkswagen Group confirms no major changes are planned.
According to Tony Verhelle, senior writer at Autogids magazine, this situation was waiting to happen. “Skoda is no longer a budget brand and the consumer knows he buys VW-technology at a better price. Also when the VW Group bought Skoda, Ferdinand Piëch wanted Skoda to become the new VW and VW had to go upmarket to compete with Mercedes. Skoda did its job but VW did not became a real premium brand and that explains the actual situation.”
It is unclear how the VW Group ceo, Matthia Müller, will react, but it is possible he won’t change a thing because internal competition might keep everyone sharp. Skoda recently sold its 20 millionth car and also does very well on the Belgian market.