Skoda delivered more than one million cars worldwide for the seventh consecutive year in 2020, increasing its European market share and assuming new responsibilities within the VW Group.
The brand delivered 1,004,800 models globally in 2020, down 19.1% on 2019’s 1,242,800 deliveries.
The drop is largely attributed to a 39-day factory shutdown as the Czech Republic declared a state of emergency at the start of the pandemic, when European distribution channels were also largely temporarily shut down. During the second quarter, the brand recorded an operating loss of €79 million (AUD$123 million).
This rebounded to €241 million (AUD$375 million) in the third quarter, and grew to €287 million (AUD$447 million) in the final quarter of the year, helping the brand to achieve positive cash flow for the year as a whole.
Overall, the brand achieved an operating profit of €756 million (AUD$1.177 billion), which translated to earnings after tax of €529 million (AUD$824 million). Pre-tax return on sales was posted at 4.4% for 2020.
Skoda increased its European market share by 0.5% last year, and now accounts for 5.4% of all models sold in the region, but was hard hit by a 38.7% year-on-year sales drop in one of its biggest global markets: China.
“We delivered a resilient performance in the face of great challenges in 2020,” said commercial boss Klaus-Dieter Schürman, pointing to drastic cost-cutting measures as a key factor in the brand’s stable performance, with €550 million (AUD$856 milion) saved in the reduction of fixed costs, alone.
Investment in “tangible assets” was reduced by 36% to €850 million (AUD$1.32 billion), while research and development costs were slashed by 27% to €712 million (AUD$1.11 billion). Going forwards, the brand plans to recommence its investment drive, pledging €2.5 billion (AUD$3.9 billion) to the development of new models and technology by 2025. Some €1.2 billion (AUD$1.87 billion) of this pledge is dedicated specifically to ‘e-mobility’.
Felix Page