It was 1991 when Skoda was bought by the German group. In 30 years, the Czech brand has gone from a local European Iron Curtain brand with quality products far from Western standards to a globally successful brand with excellent quality and best-in-class models, as evidenced by an increase in production from 172,000 vehicles of three decades ago to the more than one million vehicles in 2020.
In addition to the three original Bohemian production sites, the company also produces in China, Russia, Slovakia and India, through the Group’s affiliations, as well as in Ukraine in collaboration with a local partner. In addition to numbers and sales, Skoda has grown exponentially in terms of perceived value, winning over premium customers who just 15 years ago would never have thought of buying a car of the Bohemian brand.
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Negotiations before buying
The first contacts between Skoda and the Volkswagen Group date back to the 1970s, with an informal collaboration before the launch of the Skoda Favorit. After the collapse of the Communist regime in November 1989, Favorit’s positive impressions and the recent contacts established between Wolfsburg and Mladá Boleslav led to extensive talks on the possibility of collaboration and the negotiations soon gained momentum. The situation was clear: without a strong strategic partner, Skoda would have no chance on the world market. The annual production capacity at the time was just 200,000 vehicles and the model range combined obsolete cars with modern Favorit and Forman wagons. The future of the brand lay in the privatization of the company, which had previously been state-owned. The company’s greatest strengths were the skilled and highly motivated workforce and the strong tradition of vehicle manufacturing at the Mladá Boleslav site. Initially, 24 companies were considered as potential partners. In August 1990, the Renault / Volvo alliance and the Volkswagen Group remained in the running. On 9 and 10 December 1990, further exploratory talks were held and, finally, on 21 December 1990, the Government signed the contract with the Volkswagen Group, which had proposed a more attractive future development project for Skoda. On March 28, 1991, the Minister of Industry Jan Vrba, on behalf of the Czech Republic, and Carl H. Hahn, representing the Volkswagen Group Board, signed the main agreement for the establishment of a joint venture for the production of vehicles. ŠKODA. After the Volkswagen Group fulfilled its contractual commitments, on April 16, 1991 it received 31% of the shares of Skoda auto for a contribution of 620 million marks. Thereafter, the new shareholder gradually increased his stake until he held, on May 30, 2000, 100% of the company’s shares.
Skoda Felicia, the first in the Volkswagen era
After the acquisition, the range was expanded with a lightweight pick-up alongside Favorit and Forman. In 1994 the Skoda Felicia was presented, replacing the Favorit, which brought to the debut features such as ABS, air conditioning, power steering and engines of the 1.6 Mpi and 1.9 diesel Group.
The Octavia was the first model developed entirely under the aegis of the Volkswagen Group and debuted in September 1996, becoming an iconic model for the Czech brand.