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Skoda sales network extended to 3rd and 4th-tier cities

Shanghai Volkswagen's one millionth Skoda rolled off the assembly line of its Yizheng factory in Jiangsu earlier this July, a new record for a European brand operating in the country. However, the first half year was not smooth for Skoda. Another 5 dealers exit from the network, among which Skoda Shenzhen Zhaofang was the first 4S shop in China. Bad sales must be the top reason for the dealer to withdraw.

Skoda just published the first half year¡¯s whole operating avenue which fell 13% from a year earlier to € 4.97 billion and the first half year¡¯s operating profits also declined 46% to € 243 million. In the first half year, the global sales totaled 460,000 vehicles, down 5.8% compared with 490,000 of a year earlier. China market sales declined a bit 0.4% to 120,000 units compared with a year earlier. Last year¡¯s Skoda China market sales amounted to 230,000 units which means that it is difficult to realize year-on-year growth this year. It is said that low sales is the most important reason for the dealers to exit.

Earlier on the one millionth Skoda rolling off ceremony, Shanghai Volkswagen Skoda also published dealership network development plan. In the second half year, Skoda planned to increase the dealers amount in the rate of almost 10% so as to break out the goals of 500 dealers and will cover third and fourth-tier cities. However, when making efforts to develop network, Shanghai Volkswagen Skoda is also faced with the difficulty that many old dealers withdraw from the network.

It is learned that in the first half year, at least five Skoda 4S shops withdraw from the network, among which Skoda Shenzhen Zhaofang was the first 4S shop in China. Actually, earlier in 2010, Beijing Better Life group¡¯s exit ever drew public attention since it was the sales champion in China. Therefore, Skoda must self-reflect on the dealer¡¯s exit. The fundamental reason must be the sales problem, but there must be many reasons causing low sales.

For one hand, the launching of new products is much slower than the competitor. On the other hand, the frequent top personnel changes seriously hinder Skoda¡¯s healthy development since one brand¡¯s building needs a long-term. It is believed that Skoda has realized the existing problem. It must be a beginning of adjustment since Skoda¡¯s network begins to extend to third and fourth-tier cities and the new brand Superb will be launched on Aug. 12. Relying on SUV-Yeti and Hao Rui station wagon and new mid-size Superb in the second half year, whether Skoda will realize the new sales breakout? We will keep watching.

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