Volkswagen trying to restrict competition from Skoda

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