Team-BHP
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Over the last 26 years, Skoda has shown a steady growth and has even exceeded Audi's operating profits last year. VW sees this growth as a result of the German technology in Skoda cars along with the cheap labour available in Czech Republic. Skoda's development in electric cars is also being regarded as an unfair advantage by the German manufacturer. Thus, VW managers and unions are trying to restrict competition from their own Czech brand.
Currently, Volkswagen is struggling after the diesel-gate emissions scandal and is also cutting down jobs and expenditures at German factories. VW unions are looking to get some of Skoda's production into the underutilized VW plants in a bid to keep jobs of the people while the management is trimming excess capacity at most plants.
Cars under the VW group - from Seat to Audi use a common MQB platform. The unions also want Skoda to pay more for using this platform in their cars. Various international car reviews praising the cheaper Skoda cars over the VW cars based on the same platform have reportedly increased the unease between the manufacturers.
According to a media report, Czech Prime Minister Bohuslav Sobotka responded by saying a meeting with Skoda officials and unions will clarify things. An official working with the Prime Minister revealed that the government would be ensuring continuation of VW's investment in the country and that no production is moved outside.
Source -
Reuters Link to the Team-BHP News
Seems like Volkswagen Unions are on a combined suicidal and homicidal mission! Do these guys ever accept reality? Skoda has gained market share because of the cost advantage and these morons want to shift production to a country with higher labour cost!!! And I fear that may happen as the unions have big clout.
The moment Skoda cars gets pricier, they would just face the same fate as a similarly priced Volkswagen. I haven't heard of any company trying to hurt its own interest for short term gains, but well then the company is Volkswagen. Some cats won't learn even after drinking hot milk I guess. Maybe someone should sent the board a copy of Tenali Raman, it would be useful.
Have known internal-rivalry, internal-competition but then this seems to be more of internal-jealously. What's wrong if Skoda tunes/uses the MQB platform in a better way - VW should get more competitive rather than just curtailing Skoda and limiting competition. VW can coming up with a different platform, not sharing it with their other internal brands and then commanding a premium is more like being competitive and showing the parent brand authority. Even here between the Vento and the Rapid I found the Rapid better during the test drives. To me this seems to be VW showing it's frustration from the Dieselgate scandal on it's other brands.
That's pretty dumb! A house divided against itself will not stand!
The biggest problem with VW and Skoda is that their products are pitted against each other!
Think about it: Polo vs Fabia
Vento vs Rapid
Jetta vs Octavia
Passat vs Superb
Tiguan vs Kodiaq
What they can do is to target different buyers from the same segment- not everyone wants a sporty car vs a luxury car and vice versa.
All said and done, what they should really be doing is to improve reliability and RESPECT their customers!
Makes no sense to me!
Looks like a narrow-minded husband asking his wife to not go to work from next month, as he has insecurities with her earning more than him and ultimately taking control of the house. What he doesn't realize is that he is ultimately reducing the overall income to their house and both of them would have to suffer the consequences together! :D
VW as a brand is in real crossroads, and probably facing some kind of identity-crisis alongside its overshadowing siblings.
If VW ask a question – who am I, the answers will be somewhat like this:
1) Am I am luxury brand?
A) Yes, but at a bit more premium someone in my family (Audi) does the luxury aspect much better.
2) Am I am VFM brand?
A) Not really, Skoda – my sister from the nearby country is playing the VFM tag better, and nowadays she almost looks good (or better) as me.
3) Do I still look young/sporty?
A) Not when my sister (Seat) from Spain is around with her youthful Mediterranean charm
VW in my opinion should capitalize on its own bread n’ butter models with good brand pull (e.g.; Golf, Beetle). A Golf used to be a real special car but now it’s just one of the option in its class.
I really have no respect left for VW, what used to be my favorite budget car maker or even other German cars.
German design is known for honesty and straight forward functional yet pleasing designs. And what does VW do with that trust built after decades? Diesel gate.
The reason for Skoda's success is simply that they are not so dull and boring like current VW's, they feel like they are made by people who care about cars rather than bored accountants.
VW has such a large ego that it will chop it's own foot by trying to restrict Skoda.
/rant over.
Since VW owns 100% of Skoda's shares, crying about shared development costs and royalty does not make sense.
Had it been just 50% or 70%, then yes, it is logical for VW to demand 'more' from Skoda.
I know that this thread is meant for international markets. But with regards to the Indian market VW needn't try to restrict competition from Skoda all that much. Skoda India and its nefarious dealers themselves does a bloody good job of that.
This is a tricky situation for the VW management. On the one hand business sense says that they should continue to foster the brand that is doing good (Skoda). On the other hand its also about jobs.
Its sort of what is happening in the software industry where earlier a lot of work done in India was just repetitive work, but over time, a lot of quality work also happens here and there will be a point where the businesses will have a question about whether to foster their Indian arm that's doing well, or pay more to keep jobs at their home location.
In the end, economic sense would prevail i think!
As amazing as Ferdinand Piech was when he was on the board of VAG, and as successful as the company has been, I have never understood their strategy with Skoda. VW tried to enter our market and position themselves as a premium brand, which simply doesn't stick. We all know Audi is the premium brand and Skoda is doing a pretty good job of offering value. VW should have targeted their cars toward the corporate audience with their sombre straight lined executive styling.
Never once did VW come off as more premium to me:
Polo VS Fabia - Fabia had more space, better ergonomics (central console never used to foul with my left knee) and seemed to handle in a more predictive manner. Was so sad when they discontinued the Fabia.
Jetta vs Laura - Laura had WAY more features and was far cheaper so whatever slight handling advantage the Jetta had, could have easily been offset by better tyres.
Not once did VWs cars seem more premium in any measurable way even with all the idiots at our Indian auto magazines claiming they felt more premium. They should just stick to offering as much if not more than what Skoda is, and get their updates and launches in time. That's it. I mean they charge more for their cars so why not just offer better stuff and more features? They can't get away with offering less thinking that we believe they are a premium brand in some way so that makes it okay.
Purely talking w.r.t India market -
1. VW & Skoda - both have to worry about where they are vis-a-vis where they wanted to be.
2. VW can take solace from the fact that Skoda is as bad in A.S.S
3. VW & Skoda - how many in the market know that former owns the latter! Very few. Therefore, feedback that customers prefer Skoda over VW must make VW think what they are lacking in.
Pull up your socks, VW! Stop whining.
Just as Skoda is leveraging VW tech in terms design & platform sharing. VW too has to leverage what's good about Skoda. Low cost manufacturing to part sharing.
I think its all about the brand and jobs in Germany. Are they looking at having the same numbers with VW and Skoda added together ? By making Skoda pay royalty,
they still want the total money in the group to be same ? Would this move customers from skoda to VW ?
Its funny since Skoda cant price their cars more than VW to hurt VW's ego of being premium. Lets see how it will pan out.
I dont think there could be a better example of "cutting the nose to spite the face".
Volkswagen seriously needs to get its act together. First the emissions scandal, now this needless spat with its own sister organization.
It is my personal choice purely, but I agree with this worry of VW Group. I somehow think that the Skoda models launched in India are much better than VW products. Rapid, Octavia, Superb and Kodiaq are leagues ahead in terms of premium look & feel compared Vento, Jetta, Passat & Tiguan. I am a huge fan of the new Octavia and Jetta looks dud in front of it IMHO. No offense meant to any owners or prospective owners.
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