William Malcolm

Skoda Auto’s First-Half Profits Plunge

Škoda Auto’s operating profit fell by almost 75% to 228 million euros in the first half of the year down from 824 million euros a year ago. The automaker’s revenues in the first half of the year fell by 25% to 7.5 billion euros down from 10.2 billion euros a year ago, parent company Volkswagen Group reports.

Škoda sold 372,000 cars in the first half of 2020. A year-on-year decline of 33.6 percent. Kodiaq and Karoq sport utility vehicles and the new Scala and Kamiq models were particularly popular with customers.

The coronavirus crisis has hurt demand and manufacturing activities in the automotive sector. At the end of April, Škoda Auto resumed production at its plants in Mladá Boleslav, Kvasiny, and Vrchlabí. The shutdown due to the coronavirus pandemic lasted almost six weeks.

Škoda Auto also manufactures cars in China, Russia, Slovakia, Algeria, and India, mostly through group partnerships and Ukraine and Kazakhstan, in cooperation with local partners. It operates in more than 100 markets.

There have been several high profile departures from the company this year. The Chairman of the Board of Directors, Bernhard Maier, is resigning after less than five years leading the company, and the head of Skoda Auto Czech Republic Luboš Vlček is stepping down in September.

The company did not state the reasons for Maier’s departure. The German newspaper Handelsblatt says power struggles at the Volkswagen Group are the impetus for the leadership change. There have been reports in the media that Volkswagen is bothered by the success of Škoda, whose models are outperforming other cars of the group

In addition to Škoda, the Volkswagen Group also includes Audi, Porsche, Seat, Bentley, and Lamborghini.