A long history

The history of Skoda in China can trace back to the early years of the founding of New China. At that time Marshal Zhu De, Command-in-Chief of the PLA, chose Skoda 52-0, which was made by Skoda Auto in the 1940's, as his working vehicle. In 1999, cars of Skoda brand started its entry into China . Octavia, one of the models of the Skoda brand, was a great sales success due to its good money-for-value and excellent product quality. So far, the population of Skoda brand cars in China has reached 30,000 units.

A new start to win the future

On April 11, 2005 , SVW signed an agreement of cooperation with Skoda Auto in the Czech Republic . The event marked SVW's official acquisition of Skoda, a vehicle that had enjoyed a glorious history of over a hundred years in Europe , which also symbolized an important step of SVW's multi-brand strategy.

As one of the earliest Sino-foreign joint ventures in the Chinese auto industry, SVW has accumulated rich experience of running a car-making business for 20 years. As a result of 20 years' development, SVW has established a set of manufacturing and quality management system that is up to the international standard. SVW has fostered efficient teams in the fields of business management and product development, laid a solid foundation for parts localization, and built up a sales and marketing network that has the widest coverage in China , responds the fastest and works most efficiently with an excellent quality. Such inherent superiorities of SVW facilitated the decision of Skoda Auto to enter China as a cooperative partner to SVW. SVW's adaptability to the local conditions based on its 20 years' experience, as well as its innovative capacity, are conducive to a wholesome growth of Skoda brand in China . After introduction of the Skoda brand into China, SVW will, while keeping the original branding concept of Skoda automobiles, make full use of its product development personnel as well as its research and development capabilities to carry out innovative development for the local market taking into consideration the characteristics of Skoda products by way of combining the technology and human resource of VWAG and Skoda Auto together. Besides localizing the products to cater for the Chinese customers, SVW will work out a series of appropriate and suitable marketing programs. Market surveys and investigations indicate that the Chinese customers in their large numbers will recognize the Skoda brand and well receive Skoda products. In addition, with the brand potential combined with SVW's superiorities in network sales and aftersales service, SVW will witness a much better growth of its business on the Chinese market.

On December 8, 2005 , in the presence of Premier Wen Jiabao of the P.R. of China, a joint statement on establishing a strategic partnership was signed between SAIC Motor, VWAG, SVW and Skoda Auto. It indicated that Skoda brand, which had a glorious history of over a century, would formally settle down in SVW.

The signing of the joint statement is the first step of Skoda's successful entry into China . “We have laid the foundation for further cooperation in future via this joint statement,” said Mr. Detlef Wittig, Chairman of the trade union of Skoda Auto.

According to the joint statement, SAIC Motor and VWAG will provide all the necessary resources, including technology, personnel, so as to promote an overall strategic cooperation between SVW and Skoda Auto. Meanwhile, SVW will also provide support in terms of all the relevant data and information to get everything ready for a successful entry of Skoda products into China market. The parties have also agreed that, both SVW and Skoda Auto will make full and comprehensive use of their car-making technologies, and apply the latest ones in particular, in their joint effort to develop vehicles ranging from economy cars to B-plus vehicles that can meet the requirements of the Chinese market by drawing past experience in developing products for special markets.

The introduction of Skoda brand injects fresh blood and vitality into SVW for developing middle class and upper middle class vehicles. While the VW brand shines brightly at SVW, the newly introduced Skoda brand will not only help SVW fill in the gap in some market segments, but provide a sustained and strong support in the company's effort at developing vehicles with SVW's own property rights.

After the introduction into SVW the Skoda products, SVW will, while keeping the original branding concept of Skoda automobiles, make full use of its product development personnel as well as its research and development capabilities to carry out innovative development for the local market taking into consideration the characteristics of Skoda products by way of combining the technology and human resource of VWAG and Skoda Auto with its own. Besides adapting the products to cater for the Chinese customers, SVW will also work out a series of marketing programs for Skoda products.

Recently, SVW signed another agreement with VWAG and Skoda Auto for further cooperation concerning Skoda localization. Under the agreement, three series of Skoda products, i.e. Octavia, Fabia and Superb, will be introduced into China , which means that Skoda localization will go to a further stage and much more can be expected of the growth of Skoda brand on the future Chinese market.

With the addition of three series of Skoda products to the existing five series of VW-brand products, SVW's overall competitiveness in terms of car models has been raised to a higher elevation, and a better situation has been created for the prospect of SVW's dual brand strategy. The parallel development of two brands and eight product lineups is taking initial shape today.

To guarantee a successful growth of Skoda products in China , SVW and VWAG carried out preparatory activities for the future. In March 2006, SVW solemnly conducted a meeting of intent to invest in Skoda, at which over 500 investors from all parts of the country showed great interest. It also indicated the strong appeal of the products of SVW and Skoda brands for the Chinese customers.

Currently there are 4,000 authorized Skoda dealers in the world. Skoda Auto has established strong sales networks in many countries to provide the users with high standard service. Skoda being an entirely new brand of SVW-made products, the Chinese users will be provided with the best products and best service for them.

As a new brand in China under VW Group, Skoda has come to SVW and become the third brand from VW Group on the Chinese market following VW and Audi. Being “the third chariot”, Skoda products are shouldering an important mission of opening up the Chinese market and keeping the lead in the car-making industry.