MLADБ BOLESLAV, Czech Republic Volkswagen must have been tempted to rename Skoda Auto when it took over in 1991.
During 40 years behind the Iron Curtain, Skoda, the oldest carmaker in Eastern Europe, fell in quality and prestige. Its models were dated, factories inefficient, workers ill-trained. It began to live up to the literal meaning of its name, Czech for “a shame.”
But a decade later, the Skoda badge has invaded the cutthroat small-car market in Western Europe with surprising success. Armed with new, VW-based models, low prices and positive reviews from automotive magazines, Skoda is winning market share as far away as England and Sweden.
The turnaround has become a model of Western investment in Eastern Europe. Not only did it churn out an $87 million profit for parent Volkswagen last year, but also it helped boost the Czech Republic’s economy and steer it toward membership in Western Europe’s economic union.
Skoda “is the driving force of Czech industry,” boasts Vratislav Kulhanek, company chairman. Skoda’s 25,000 workers make it the country’s largest employer. Most of them work in the clean, modern plants here.
Last year, Skoda accounted for nearly 10% of the nation’s exports, helping the economy grow for the first time since 1996. The company spent about $750 million with Eastern European suppliers.
Analysts like Volkswagen’s approach. Instead of simply installing VW equipment and slapping on the Skoda badge, the German parent has worked with Czechs to create cars that are different enough to attract new buyers.
Skodas look more traditional than the VWs on which they are based. The bodies of the two main model lines, Octavia and Fabia, are more rounded and less high-tech-edgy than the VW Golf and Polo that provide underpinnings. VW noses have black slats with a simple round insignia; Skodas have chrome-colored grills.
Skoda engineers mix and match VW components and make adjustments that Czech drivers like. For example, Skodas are biased toward supple suspensions to soak up the bad roads in Eastern Europe. That shock-absorbing trait has been noted across the continent.
Better than VW?
“This car proves that Skoda truly understands the importance of good damping more so than parent company VW,” wrote Britain’s Autocar magazine about Octavia.