According to CEO Klaus Zellmer, the Czech automaker Skoda Auto, a subsidiary of Volkswagen, is thinking about leaving China and will decide next year. This was reported by the weekly magazine Automobilwoche.
The chief executive suggested the company may explore simply selling automobiles in China rather than also building them there. Skoda wishes to concentrate more in India at the moment, Zellmer said.
"The competition is very intense there, so we will consider, together with our Chinese joint venture partner, how we want to proceed," Zellmer said. "If we want to focus our energy, it's worth checking all scenarios and then deciding."
In a statement to Reuters, Volkswagen claimed that Skoda constantly monitoring its position in global markets and adjusting that to local developments was standard business practice. "There have been no decisions so far on possible modifications in our strategy," the company said.
Volkswagen committed to producing passenger cars in Shanghai for 25 years in 1984. Volkswagen's venture accepted the cap of 50% foreign ownership because, at the time, automakers were not allowed to own a majority stake in a manufacturing facility. Currently, the Group has 16 representative companies in the nation that handle vehicle production and import as well as service and part delivery to customers and the industry.
By May 2004, Volkswagen Group had consolidated its powers in the formation of Volkswagen Group China (VGC), which is governed by a six-member top management responsible for the areas of sales and marketing, technology, purchasing, personnel, and governmental affairs as well as finance. VGC's tasks include oversight of the Chinese-linked firms of the Volkswagen Group and the set-up of new business areas.
India has emerged as one of Volkswagen Group's key focus markets. Volkswagen has recorded the biggest year ever in India within the first eight months of 2022. These remarkable achievements have allowed India to rank among the top three markets for Skoda Auto worldwide in the first half of this year, says Zellmer.
After the success of its 2.0 plan, Skoda Auto is already debating its next strategic step for India, according to Zellmer, the company's global chief executive. In his first interview with an Indian media outlet after taking over, he claims that the nation has evolved into a key focus market for not only the Czech automaker but the entire VW Group, for both domestic sales and as an export hub.
