The Death of the Skoda Joke and the

Rebirth of the Brand.

 
 Objectives
• Defining the business

• Portfolio analysis

• Environmental situation

• Internal appraisal

• Strategy and the future

 Car Industry

•Car industry divided

between 6 key
multinationals

•Skoda is part of the

Volkswagon group

•Competes with
Volkswagen!!!
 History of Skoda
• 3rd oldest manufacturer – 1885

• 40 year monopoly in a
command economy

• Velvet Revolution led to

search for partner

• VW took 30% share and

started work in ‘91
 UK Car Industry Breakdown
UK Market Total 2.6 million units 2003

% Market Share Skoda

Toyota
1. 37 4. 78
4
BMW
6. 92
Peugeot
4. 66
41. 41
Citroen
Ford
13. 99
Honda
Vauxhall
4. 06
6. 39 12. 42
Renault
Others

Sourced from www.smmt.co.uk

 Environmental Analysis
Overall the UK new car market outlook is positive.

• 2003 was a record year - 2,579,050 million new car

registration

• Christopher MacGowan (SMMT)– “we could be looking at a

fourth consecutive record year. March has surprised everyone
with the sale of 450,000 units.”

• In 2003 skoda’s share of the market was 1.33

• March 2004 it was 1.37

 
Skoda Statistics
 Sales
Sales were down in the UK IN 2003

• Down 3% to 37,103
This will help explain its drop in Market Share
(1.5% to 1.33%)
Segmentation of UK Car Industry
Market Share % 2003
Mini 1.5%
Fabia Super Mini 33.9%
Octavia Lower Medium 27.9%
Upper Medium 18.6%
Executive 4.6%
Superb Luxury 0.5%
Sports 2.5%
Dual Purpose 4x4 6.2%
Multi-purpose vehicle 4.3%
PMP for 3 Vehicles
 Porters Five Forces
Threat of Entrants
(V. High)

Power of Suppliers Rivalry Power of Buyers

(V. Low) Rivalry
(V. high) (low)

Threat of Substitutes
(V. low)
Three Types of Skoda Owner
Skoda Fabia
U.K Super Mini Segment

33.9% of the total U.K Car Market

 U.K Super Mini Segment

• Market trends:
- Styling
- More Luxury Features
- Record Diesel Sales
- ‘Greener Cars’
 Competitors
Manufacturer Sales R.M.S

Corsa 108, 387 1

Fiesta 95,887 0.884
Clio 83,972 0.77
206 82,667 0.76
Punto 59,573 0.55
Fabia 21,929 0.19
 The Fabia
• ‘Compact Yet Confident Stance That Marks It
Out From Its Rivals’
• Reliability and Quality
• Classless Image
• Good Performance Statistics – Particularly the
2.0 Litre 115 Bhp Version
• Estate Version has no real rivals
 Pricing Strategy
• £7,495 – £ 12,770 On The Road

• No Longer Relies On Price As A Basis For

Competition

• Tactically Positioned Between Competitors

 Distribution

• 1980’s, “Trying to Sell Skoda’s is

Like Trying to Sell Nuclear Waste”

• Now - Dealer Networks Expanding

• Architecturally Superb Ergonomic

Designed ‘Flying Wing’
Showrooms

• Waiting Lists!
 Promotion
- Modest Budget For
Advertising
Campaign

- Self Deprecating

- Marketing Method

- Award Winning
 Campaign Results
• Skoda has lower rejection rate than Fiat or
Citroen

• 60% agree that Skoda is improving

• 84% believes the campaign makes a point in a

clever way

•29% Sales Increase

The Headlines
 Skoda Fabia – A Success?
• Award Winning

• Changing The Perception of Skoda’s

• New Models e.g the R.S

• Waiting List!!

• However - No Breakthrough into the Big 5 & Sales

are Falling Off
 How successful has the company
been?
3,500

3,000

2,500

2,000
profit after tax(CZK
1,500 millions)

1,000

500

0
1999 2000 2001 2002 2003
 Skoda Sales by Model
1999-2003

158503 164134
164017 165635
143251
Octavia
Fabia
823
128872 Felica

250978
264641 260998
241256

148028

22963

1999 2000 2001 2002 2003

Ye a r
 Market share
1.8
1.6
1.4
1.2
1
Western Europe
0.8 UK
0.6
0.4
0.2
0
1999 2000 2001 2002 2003
 Selected Financial Data
2000 2001 2002 2003
Net Cash (10,580) 18,647 6,924 16,677
Flow
Net (4,007) (798) (4,660) 2,495
Liquidity
Return on 9.3% 8.4% 5.7% 8.5%
Equity
after Tax
Net Profit 3,336 2,129 1,825 1,478
(CZK million)

Market 1.3% 1.5% 1.5% 1.4%

Share (uk)
 Results
• UK market share increased
• Ranked 2nd overall in 2004 (J.D.Power,
Customer satisfaction)
• All Skoda models ranked in top 10 (Which Car?
Survey)
• 98% of skoda owners would recommend to a
friend, 95% would purchase again
• Skoda overall satisfaction rating 87%
 Summary
• Maintained a good growth level
• Set up strategic partnerships with
suppliers and distributors
• Loyal customer base
• Expanding customer base
• Looking to the future optimistically
 Outlook/Strategy
• Reinforce current position.
• Development markets in
Eastern Europe and Asia
• Increase profitability (ROI
9%)
• Continue to upgrade
production technologies
and processes
• Re-launch website
 2004 Marketing Strategy
• Develop The Roomster model
• Launch the 2nd generation Octavia
• Concentrate on existing customers
• To implement the company strategy
based on

EMOTIONALISING THE BRAND AND

GIVE IT A SHARPER PROFILE IN
INTERNATIONAL MARKETS
 Conclusion
• Skoda has a well known brand name
(albeit for the wrong reasons)
• Attitudes are changing and it is time for
a rethink of the marketing strategy
• Put an end to the jokes and market its
merits
• The product has gone from ‘the brand
from hell to one hell of a brand!’
• Thankyou For Your Attention

Are There Any Questions?