VW

Skoda is a car brand that has been inexorably on the rise for some time. But has the brand’s outstanding performance figures put it on a collision course with its parent brand Volkswagen?

The answer to this depends on who you listen to really. Certain VW sources suggest the firm is taking steps to check its ambitious family member, especially over its affordable pricing and growing range of award winning models.

One possible way Volkswagen could bring their Czech-mate in step is by charging Skoda a higher rate for technology shared by the two companies. Another is by moving production from the Czech Republic to Germany, helping offset astronomical costs incurred by the Dieselgate scandal, that continues to rumble on. VW have already cut thousands of jobs in an attempt to streamline its operation.

A report by Reuters shows how Skoda has benefitted from the VW Group’s latest tech plus a cheaper to employ workforce. Since the collapse of the Soviet Union in 1991, Skoda has been part of the VW Group. Since then, the German company has transformed the ailing car maker’s fortunes, making Skoda one of the most successful mid-market car brands – even surpassing Audi’s operating profit margin in 2016.

The Reuters report points at the key point of conflict being the competition for resources between the marques ahead of the VW Group’s announcement of its intention of releasing 50 electric cars by 2025.

The main union representing Skoda workers has pointed out that the shift of resources from the Czech Republic to Germany could cost at least 2,000 jobs. Czech Prime Minister Bohuslav Sobotka has expressed his concerns, with his office stating: “The government has a clear interest which is that all planned investments by VW and Skoda in the Czech Republic are carried through and that production is not moved outside the country.”

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