Skoda aims to double China sales by 2020, largely on back of SUVs

Czech automaker Skoda is planning to double its current China sales by 2020, as it is introducing a richer lineup of models into its largest market worldwide.

"China is our most important single market and we hope to double our annual sales to 600,000 cars a year by 2020," said Skoda CEO Bernhard Maier at a news conference on Aug 22 in Shanghai.

Skoda sold 310,000 cars in China in 2016. The automaker entered the Chinese market in 2007 and has since localized its models with SAIC Volkswagen.

Maier said Skoda is to introduce five SUVs into China to seize the opportunities of rapid SUV growth in the country.

SUVs have been the fastest-growing segment in China. Statistics from the China Association of Automobile Manufacturers show that from January to July, 5.21 million SUVs were sold, a 17 percent rise year-on-year.

As the first salvo of its SUV offensive, the mid-sized Kodiaq has hit the market earlier this year, and the smaller Karoq is scheduled to be unveiled in February or March.

Michael Arndt, executive director of Skoda's sales business at the joint venture, estimated that SUVs will contribute 50 percent of the growth needed to realize the goal of doubling its sales.

He said such new products are also burnishing Skoda's popularity in China. Arndt said the launch of Kodiaq has raised the automaker's brand awareness by 10 percent.

Skoda has also localized its estate car the Octavia Combi as the latest member of the Octavia family.

The Octavia sedan, with the latest generation unveiled on Aug 22, has been its best-selling model. Over the past 10 years more than 1.35 million have been sold in China.

Arndt said the Octavia Combi has been the best selling of its class in European countries including Germany, Italy and Sweden.

But its introduction into China is not made to reap big sales in the current stage, but rather with an eye on its future prospects.

"It is here to open up a new segment," according to Arndt.

Maier said electric cars will be another pillar of its development in China.

Skoda showcased its concept car, the Vision E, earlier this year at the Shanghai auto show. The car has a maximum output of 225 kilowatts and can run at a top speed of 180 kilometers per hour, with a mileage of 500 km. It also features Level 3 autonomous driving, which means it can drive itself on expressways and park itself without human intervention.

Maier said the car will hit the market in 2020 and launch five new energy cars before 2025. In the long run, Maier believes electric cars will account for a quarter of cars sold in the market.