Czech automobile manufacturer ŠkodaAuto has announced drop of just under one third in profits for the period from January to June 2022, according to performance data released by parent company Volkswagen.
Various factors have contributed to the drop in profits, with operations strongly impacted by international sanctions placed on Russia, the company’s second largest market. Škoda’s revenues have also been affected by post-pandemic economic disruption, rising production costs, unfavourable exchange rate trends, and the limited availability of raw materials. The company’s operating profit for the first six months of this year thus fell to 676 million euros (CZK 16.6 billion) from 974 million euros (CZK 23.9 billion) a year earlier, a drop of 30.6%.
From January 1 to June 30, direct-to-customer deliveries of Škoda vehicles totaled 360,559, compared to 515,277 in the first half of 2021, a difference of almost 160,000 units. Škoda’s total sales were 447,000 vehicles, down 3.5 percent from the previous year. The decline in sales in Europe was partly offset by growth in India. In particular, sales of the Enyaq iV model increased.
Škoda has also been honoured with several awards in recent months. In April, Škoda’s Enyaq iV won the Best Value Electric Car award. In mid-May 2022, Škoda’s Fabia received the Red Dot Award in the product design category. This is the 17th time Škoda has won this award in one of the world’s best-known design competitions, considered the seal of high-quality product design. The international jury of experts consists of independent designers, design professors, and trade journalists.
Škoda Auto operates three production sites in the Czech Republic, but also produces in China, Slovakia and India, mostly through group partnerships, as well as in Ukraine and Kazakhstan in cooperation with local partners. The company operates in over 100 markets. In early March, Škoda Auto announced that, due to the Russian invasion of Ukraine, it would suspend production at Russian production facilities in Kaluga and Nizhny Novgorod and stop exporting cars to Russia. Until last year, Russia was its second largest market.
Overall, parent company Volkswagen’s operating profit increased 16.1%, over 13 billion euros in the first half of the year. Sales increased 2% to 132.3 billion euros.
