Skoda Case Study

939 Words4 Pages
Mini-Case: Škoda Auto Rebirth and VW Global Strategy Prior to 1989, nine independent manufacturers in CEE were producing some 3.2 million cars. After 1989, all major producers of passenger cars formed joint-ventures with, or were taken over by, Western partners: Polish 'Polsky' by Fiat, East German Wartburg by GM-Opel, IMV in Slovenia by Renault. Škoda Auto , a Czech company with 100 years of experience in car industry, was the most advanced manufacturer in the region and was the only one to produce its models based on its own technology, rather than on Western licenses. In August 1990, the Czech Republic's government was looking for a strategic partner for Škoda and concentrated on two bidders: Volkswagen and Renault. VW overcame Renault and won the bid. It promised to invest €4.6 billion in Škoda by 2000. For Volkswagen it was an important step towards the Eastern European markets (fig. 1) . Location advantages, highly skilled workers among the 18,000 employees at that time, an appealing level of engineering. For the Czech government it was a contribution to the transformation process of the economy. The common objective was to transform Škoda, a company previously characterized by socialist structures, into a customer oriented, learning organization and, thus, to "best-in-class" level. Škoda in the 1991 – 2001 period Although VW had not yet reached the promised investment level, Škoda's first decade of VW ownership has been a success story. In 1991, Škoda built 172,000 cars. In 2001 it built 450,000 units. While volume more than doubled, revenue rose eight-fold, from €0.5 billion to €4 billion. In 1991, Škoda exported 26 percent of its production to 30 countries. In 2001 it exported more than 82 percent of output to 72 countries. Škoda still holds over half of the Czech Republic and the Slovakian markets,

More about Skoda Case Study

Open Document