Volkswagen is searching ways to increase production at Skoda, including construction of a new factory outside the brand’s Czech home, to help it keep up with rising demand, company sources stated.
Best known for its low-priced vehicles, Skoda moved last year into the fast-growing industry for sport-utility vehicles (SUVs) with the new Kodiaq and Karoq models, and strategies to introduce another 19 models by 2020.
But moves to boost capacity at its major Czech plant in Mlada Boleslav, where it constructs more than half a million cars annually, are in limbo as the Kovo union opposes increasing the work-week to Saturday, two Volkswagen (VW) group sources stated.
Skoda has offered to generate 3,000 jobs in the Czech Republic if labor leaders consent to more shifts at the two automaking plants, a move management states could increase output at Mlada Boleslav alone by 83,000 cars annually.
“Additional capacity is absolutely required to be able to meet continually increasing demand,” Skoda stated in an emailed statement. “The company has been producing at full capacity for some time.”
Increasing demand in Europe and China has assisted Skoda’s sales to increase nearly a third over the last five years to a record 1.2 million cars in last year.
Sources stated Skoda could miss out on about 360,000 car sales by 2020 if capacity is left unchanged. Production of Skoda models has been extended recently in markets including China, India and Russia.
Volkswagen and Skoda are aiming to find solutions by the summer, the sources stated, to help the brand with its motive to expand foreign sales to 120 countries, from about 100, by 2025.
Deliberations include searching for under-used capacity under the Volkswagen group, in addition to investing in a new facility outside the Czech Republic where production could be shared with other Volkswagen brands, the sources stated.