Economy

Should Škoda stay in China? Dispute broke out at VW, chief strategist leaves

The smoldering controversy over brand positioning and geographical presence of the Czech subsidiary Škoda Auto flares up again in the VW Group. The current trigger is the upcoming departure of VW chief strategist Michael Jost. The confidante of group leader Herbert Diess has informed Wolfsburg companions about his planned exit. The “manager magazin” reported on this first.

As NewsABC.net learned from several sources, Jost recently argued vehemently that Škoda should withdraw from what is by far the largest single market in the global vehicle business – namely China. Central reasons of the VW pioneer: With VW’s Chinese joint venture partner SAIC Motor Corporation Limited, VW’s Ingolstadt premium brand Audi could achieve far better business margins in the foreseeable future than with Škoda. In addition, the volume segment in the Middle Kingdom is adequately covered with models of VW cars. Below VW Pkw, in turn, the Wolfsburg-based company is well positioned thanks to its new Chinese low-budget label Jetta.

“There are serious considerations about withdrawing Škoda from China. In addition to Audi and VW Passenger Cars, we now also have our Jetta sub-brand, which has been successful right from the start ”, confirmed a VW executive who wanted to remain anonymous, the exit option in an interview with NewsABC.net. “In order to position Škoda more strongly in China, to have to accept less internal VW cannibalization there, one would need, among other things, enormous sums of money for marketing funds. And this money could be better spent elsewhere for Škoda. “

But Škoda’s brand management board, under the direction of the new CEO Thomas Schäfer, does not believe in Jost’s plans. The committee – Maren Gräf (Human Resources) and Martin Jahn (Sales / Marketing) were newly added at the beginning of March – are unanimous in favor of Škoda remaining in the Middle Kingdom, reports VW group managers.

The arguments of Jost’s opposing side are sound: China is such a large single market that without the production and sales figures from there, future Škoda projects can be calculated less well – some not at all. In addition, China as a region is of enormous relevance in the Far East and has a positive effect on booming emerging countries in the Asia-Pacific region. This important effect would not apply to Škoda, which is heavily involved in India, for example. And: Škoda has also developed into an SUV brand, and more and more customers around the world want these high seats on wheels. On top of that, Škoda is massively electrifying its model range, which is precisely what the Chinese government is demanding.

Martin Jahn has a key role to play in the struggle for Škoda to remain in the Middle Kingdom. Born in the Czech Republic, as a former Minister of Economic Affairs and former Vice Prime Minister, he is still very well connected in the politics of his home country. As a former Managing Director of the Volkswagen brand at the FAW-VW joint venture, he knows many plans of the SAIC competitor China FAW Group, previously First Automotive Works (FAW), inside out. In addition to the VW top manager Harald Müller, who died in 2020, Jahn played a key role in developing the VW sub-brand Jetta.

Whatever the strategically groundbreaking decision for the VW Group, Michael Jost has weakened his position with the exit advertisement to VW executives. And this is how it works: On the website www.jost.de, the outgoing VW strategist shows not only his private plans for the future, but also some milestones in his professional career to date. Under the item “2018 – Smart Cars”, however, as well as in his download file “Time for change has come DE / EN”, Jost first used a picture of the future car project “Trinity”, which, according to the taste of the VW superiors, already revealed too much of the possible design of the electric flat-seater, which will only roll out in 2026. In the meantime, Jost has exchanged the computer-animated motif – for a neutral sketch of the vehicle that has already been presented to the public many times and that reveals little more than its silhouette.

But some Wolfsburg managers were smart enough to make copies of Jost’s original version – and so nice to share their “little treasure” with NewsABC.net. Therefore you can see the presentation in the original version at the top of this page.

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