Skoda Auto production line

William Malcolm

Skoda To Make Quarter Of A Million Fewer Cars This Year Due To Chip Shortage

The lack of chips and the associated significant reduction in production will significantly burden the fourth quarter, said Škoda Auto in a press release. The company responds with increased cost discipline and the introduction of an extensive program to increase efficiency. In the period from January to September, the carmaker Škoda Auto almost doubled its operating profit to 900 million euros (approximately 23 billion CZK) from 469 million euros a year ago. The favorable development of exchange rates and margins contributed to the growth in operating profit.

“The shortage of semiconductors and the limited availability of parts due to bottlenecks in the automotive supply chains have been a hard blow to Škoda Auto’s strong growth rate since Q3. Despite continued demand for our vehicles and high orders, we must reduce our production. In this difficult situation, which leads to a reduction in deliveries to customers, we have finally doubled our operating result in the first three quarters compared to last year, thanks to consistent product mix management and continuous cost reductions, “said Christian Schenk, Member of the Board.

Due to the lack of semiconductors, the Czech carmaker will significantly reduce its production in the coming weeks. The company expects to produce about 250,000 fewer cars by the end of this year due to lack of parts. According to Škoda, the situation with semiconductor supplies will stabilize again from the fourth quarter of 2021 and will gradually ease in the second half of 2022.

In the first three quarters of this year, Škoda Auto delivered 700,700 cars to its customers, down 2.9 percent year on year. In the domestic market, the Škoda brand increased its deliveries to customers by 1.1 percent to 63,000 vehicles. In its largest world market, Germany, the carmaker recorded a total of 104,600 deliveries to customers in the first three quarters of 2021, down 7.6 percent year on year. In China, deliveries to customers fell 57.8 percent to 52,700 vehicles in the first three quarters of 2021. The best-selling model remains the Octavia, which Škoda delivered 159,400 from January to September, down 15.9 percent year on year.

Last year, Škoda Auto delivered over a million cars worldwide. It operates three production plants in the Czech Republic, produces in China, Russia, Slovakia and India, mostly through group partnerships, as well as in Ukraine and Kazakhstan in cooperation with local partners. It is active in more than 100 markets.