Volkswagen Expects Sales Increase Due to Skoda

by : Anthony Fontanelle

The partnership between Chinese and European automakers which resulted in the formation of the Shanghai Volkswagen Automobile Company is currently looking to boost their sales and share in the market in the near future. The automaker is looking at a car brand which has been on the receiving end of many a joke in the past - the Czech automaker Skoda. The Shanghai Volkswagen Co. sees Skoda as a way to boost their sales in the second largest auto market in the world.

The Shanghai Volkswagen Company is a 50-50 venture between the SAIC Motor Corp and Volkswagen AG. The partnership announced that they are expecting the recent launch of Skoda auto models in the country will boost overall sales. Skoda is wholly owned by Volkswagen AG. According to the company, they are expecting Skoda to corner 2.5 to 3 percent of the passenger car market in China before the turn of the decade.

The venture between the Chinese and German automobile manufacturers though did not divulge how many units of Skoda vehicles they are expecting to sell by 2010. Analysts and experts in the filed touted the move by the venture as a bold one considering the popularity or lack of it of the Skoda brand in the Chinese auto market.

Shanghai Volkswagen though announced that they are aiming to sell over 30,000 units of the Skoda Octavia in China this year. The Skoda Octavia is a compact sedan which is aimed to attract the attention of Chinese auto buyers looking for an everyday car with a good fuel efficiency and practicality.

The 30,000 goal for the Sino-German is part of its aim to increase total Skoda sales from about 352,000 units last year to 400,000 this year. The first batch of Skoda Octavia manufactured completely in China was released on the sixth of June this year and it has already received good reviews from Chinese auto publications.

From January to June this year, the venture posted an increase of 23.1 percent in sale - an indication that the Chinese auto market is still growing. The venture sold 213,735 units for the first half of the year. Of that number, 3,000 units were Skoda Octavias. The sales for the first half of the year put the Shanghai Volkswagen as the third largest passenger car manufacturer in China. The second largest also involves Volkswagen and its tie-up with FAW Corp. The largest car manufacturer for the first half of the year in China is the venture between General Motors and SAIC.

The Chinese auto market is still expected to grow beyond 2010. Yale Zhang, the director of Greater China Vehicle Forecasts, predicts that passenger car sales in China will reach 5 million this year. After that, it is expected to grow to about 7.2 million units by 2010.

A statement from the Shanghai Volkswagen venture reads: "The introduction of Skoda is the start of our multi-brand strategy and will expand our lineup to satisfy growing customer demand."

The venture between the Chinese and German automaker manufactures different auto components such as the and such and entire vehicles even. The venture produces Volkswagen nameplates such as the Santana, Passat, Polo, Golf, and the Touran. Aside from the Octavia, the venture will also introduce other Skoda auto models in the country in the near future including the subcompact Fabia and the midsize Superb.