By on June 15, 2016

Skoda Octavia RS Wagon, Image: Skoda

There’s been much talk lately about the possibility of Czech automaker Škoda entering the American market, spurred by news of the brand trademarking some model names in the USA.

The idea is that Škoda could complement or even replace Volkswagen on American soil with its larger, cheaper cars. But can it make sense? Can Škoda offer something that VW can’t? Is it better suited to American tastes? And, is it cheap enough? Let’s look at all these question with the eyes of someone who’s familiar both with Škodas and with American cars and consumer tastes.

At first glance, importing Škodas to the North America is the smart thing to do. In a way, they are the same thing as Volkswagen’s U.S. cars — they’re a bit bigger than their German counterparts, a little bit cheaper and somewhat de-contented to make the previous trait possible. While VW USA has its Jetta, Škoda has Golf-based Octavia. The American Passat has its counterpart in the Superb. The Czech cars are almost identical to the German ones in technology and mechanicals — they use the same platforms, same infotainment systems, the same parts bin.

The deeper you look, though, the harder it is to make case for Škodas being sold in the USA. I’ve driven them all, and I know enough about American tastes and the market to see some problems in the whole venture. While I won’t say that it’s impossible, here are some problems that have to be solved before Jalopnik readers can start buying the diesel manual wagons from Czech Republic they always dreamed about.

First of all, it seems that there’s a lot of misconception in America about Škoda’s pricing and market position. It works two ways, and both are wrong for the brand’s success. First, the Škoda has the image of a “cheap” VW brand. If anyone in the USA knows it exists, he usually expects it to compete with Dacia or something. And while the number of people who already know about Škoda’s existence is negligible, it’s very likely that if the brand is to come to the US market, the first news coverage will be along these lines: “Volkswagen’s cheap brand.”

That’s bad for brand image, of course. Especially when you consider the fact that while Škoda really is, together with Seat, VW’s “cheap brand”, it’s because Volkswagen itself is moving up-market and is now wandering into the murky “sub-premium” class. This leaves Škoda (and, to some extent, Seat) to compete with the likes of Opel, Peugeot, Renault, Hyundai or even Ford. And the pricing reflects that. Škodas usually are only marginally cheaper than VW’s — for example, the base Superb costs (on the German market) about $1,000 less than the base Passat.

In most markets around the world, this is no real hurdle. While VW takes on the role of “sub-premium” German brand, Škoda aims at the “value-for-money” segment, in a similar way Volvo did decades ago (before it became semi-premium itself). Instead of being significantly cheaper, it offers basically the same cars, but with slightly cheaper materials, which are made up for not in price, but in size.

For the price of the Golf, or slightly below, you get the Octavia, which is a lot like a more sophisticated Jetta. It’s got the same chassis, same engines and the same technology as the Golf, but it’s bigger and more practical. The same can be said about the Superb, and while in Fabia the difference from the Polo is much less apparent, it still offers the Combi version.

One way to look at the difference is that Škodas do for emerging markets what VWs do for Western Europe. In Czechia or Poland, the Fabia fulfills the same role as Golf does in Germany or UK. Octavia is based on Golf, but serves the role of “basic executive sedan”, like the Passat, in richer countries. The Superb is, in many ways, a poor man’s Phaeton. It was even designed with the intention of being used as chauffeured car. I’d even go as far as saying that the Octavia vRS is a working man’s Audi S4.

By now, you can probably see the problem. Škodas are, in fact, much closer to German VWs than American VWs are, both price-wise and technology-wise. Especially in the case of the Superb versus US Passat, the Czech car would compete directly with the Passat. Octavia would be in slightly better position, offering a large alternative to the Golf at the same cost (and probably killing the Jetta in the process, as it did in Europe),though there are a few cars that could genuinely work stateside. Like Rapid, which offers Golf-like space with low-tech solutions for the price of Fabia (a subcompact), thus being a perfect competitor for cars like Mitsubishi Lancer, or the Yeti, a funky little off-roader that could go head-to-head with Kia Soul or Jeep Renegade.

Without sorting out the situation in bread-and-butter market segments — like midsize sedans — Škoda’s American venture can never work. So, what to do about it? Decontenting is not really an option — with Škoda already building cheaper alternatives to VW on the same tech, there’s not much space for savings. Base Škodas, designed to create nice “starting at” prices, are already pretty cheaply made, as are the basic European VWs.

The cars most people buy are much more expensive, with nicer trim and a lot of technology. A top-of-the-line Superb would probably cost close to $40,000 U.S., and a typical one would be close to 30 grand. That’s Camry or Fusion money.

So, it looks that there’s only one solution to the VW’s American conundrum — and it’s the one they would probably have been the best from the beginning. If Škoda is to enter American market, it will mean the end of the Americanized Volkswagens as we know them. The only path for VW in America is to go up, import the true German models and stop trying to be an American brand. Passat can never beat the Camry in its own game, and should stop trying. The Euro Passat can be a great alternative to Acura or Lexus, with its nicely made interior and state-of-the-art tech. The American Passat needs to die, along with the Jetta. Those who want a German car want it really German, not Americanized.

This move upmarket would make room for a Ford, Toyota or Mazda competitor underneath, and that’s where Škoda can fit in. The literal billion-dollar question is whether such a move is feasible in the current environment. Will Americans pay nearly BMW money for Volkswagens? Will they pay Volkswagen money for cars made somewhere in Soviet Russia? Is VW willing to spend hundreds of millions to find out?

[Image: Škoda Auto]

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84 Comments on “Škoda in America: Does It Make Sense?...”


  • avatar
    JimZ

    No it doesn’t. Launching a new brand in a saturated market is *hard.* The only real success in recent times is Tesla, and they did it by building a kind of car *no one else was making.*

    trying to launch a brand filled with “me too” vehicles is pointless.

    • 0 avatar
      28-Cars-Later

      I agree completely, there are already too many brands.

    • 0 avatar
      Easton

      I also agree. But I somehow doubt this is VW’s intention. Patenting a name in America doesn’t necessarily signal an intention to import it.

    • 0 avatar
      2kriss2kross

      Our market isn’t close to being as saturated as markets in Europe and Asia, even Australia a nation with a population 10x smaller than ours has more variety.

    • 0 avatar
      Big Al from Oz

      JimZ,
      If you believe what you are stating (saturation) with such a huge market, then what is wrong with the market that does not encourage competition?

      I believe that the strongest will survive. Let the non performing business fall off the edge. Look at Cadillac. If the US government didn’t “sponsor” or give special allowances/tax dollar to GM do you think GM would still be interested in Cadillac? No. They would concentrate on more profitable and competitive products.

      Take FCA for example. Your logic tells me you think that FCA has issues with not just quality, but a saturated market?

      The area of the US market that is significant, ie, pickups is protected. If the Chicken Tax was not there, you would have a large number of imported pickups. But on the other hand the US would now be exporting a large number of pickups that is designs to compete effectively. Don’t worry you guys would still have full size pickups with EcoThirst engines and Hemis.

      I do believe there is scope for a better vehicle market in the US. Most issues like your belief in a saturated market is driven by the manner in which barriers, controls, regulations, etc effects the market.

      What drives markets, any market? Supply and demand. Any of the above that I mentioned will influence and shape a market.

      Here’s what affects markets;
      1. Cost of vehicle,
      2. Cost of fuel,
      3. Cost of maintenance,
      4. Barriers and policy driven via government controls, even licencing, taxes, tariffs, safety and design regulations, etc.
      5. To a degree “patriotism”,
      6. Lifestyle/income
      7. Supporting infrastructure, ie, road and bridges.

      The cost elements are also driven by political/economic situations that affect pricing and employment.

      I do believe the US vehicle market has so much more potential if it was managed a little differently instead of placating Detroit, UAW and other large corporations and energy.

      I say free up the market let the sh!t sink, then rebuild. The shake up would not be as drastic as one would assume either. More efficient plants would be built to utilise less resources and the US vehicle market will be set for a far better future.

      True and free competition breeds, efficiency, progress and less costs.

  • avatar
    MrGreenMan

    If they were to bring Skoda (and no American knows how to find that accent on the S, so it’s never going to be Škoda to us), it would be a hail mary move by VW USA, and it would be to replace VW, because the guys in yoga pants who drove Jettas to look down with self-righteous smugness on “domestic” and “Asian”-driving hoi polloi are a people who do not know forgiveness and who view an apology as an admission of guilt rather than as an appeal to mercy.

    EDIT: Although, I would find it hilarious if they issued an American version of one of their little Jetta-like cars and called it the Rhapsody.

    • 0 avatar
      Lorenzo

      That’s the only option for Skoda – Volkswagen would have to abandon the US market, with Skoda replacing it. It would be a tough pill for VW to swallow, but the scandal has tainted Volkswagen so badly, it might just withdraw from the US market and bring in Skoda.

      After all, the scandal hasn’t damaged Audi, and Skoda could occupy the price rung below it, using the Volkswagen dealers/distribution channels. I’m sure somebody in Wolfsburg is thinking about that doomsday scenario, and that might be the source of the Skoda idea.

  • avatar
    threeer

    Sat in a Rapid Spaceback while at the Croatia Auto Show a few weeks back and really liked it, but I guess that’s because it reminded me so much of my (since departed) Lancer Sportback Ralliart. That said, a small wagon has as much chance at selling here as a two-seat hybrid/sport does. the Yeti could stand a chance because CUV. Not sure how a brand that is supposedly a notch below VW would fare here, though. Manufacturing provenance would likely not matter (see: Chinese-made Buick/Korean-made Chevy) as most folks can’t tell (or don’t care) where their cars are manufactured anymore, so an Eastern-bloc near-VW wouldn’t be any different as far as that goes. I guess it would come down to price vs. content. If they came over at all, they’d have to be priced lower than a VW but keep the content up, and beyond the downgraded US-variant VWs we get now.

    My money is on the “ain’t gonna happen” camp. But I’d still love a manual-tranny Rapid Spaceback, just because (or even the Fabia Combi).

  • avatar
    Kenmore

    Do they have a CUV >64″ tall or are they committed to squashy things like the Kodiaq?

  • avatar
    notwhoithink

    No, Americans are not going to be willing to pay BMW money for a VW-badged car. Look at the utter flop that was the Phaeton (outside of the fact that Baruth bought two of them). This is compounded by the fact that VW has slashed prices and stacked incentives in the post-dieselgate fire sales in the United States. Right now there is hardly a better “value for money” proposition than a VW being sold regularly at $4k-$6k under MSRP.

    • 0 avatar
      JimZ

      VW wanted to be the biggest automaker in the world at any cost. So they read from the “Build Empire & Chase Volume” playbook, and were too arrogant to understand that never ends well. It’s not like they didn’t have a couple of shining examples (GM, Daimler, Toyota) to learn from.

      • 0 avatar
        RobertRyan

        Slight trip, but still on track to overtake Toyota, the Corp that is

      • 0 avatar
        Big Al from Oz

        JimZ,
        VW still is in there with a chance.

        I do believe this will blow over similar to the way Toyota’s unintended accleration issue blew over.

        VAG is one of the better operators around, especially with the brands it has.

        I believe that VW has done well to differentiate it’s brands. How many people associate Bugatti with VW, or even Porsche? Not many would associate Skoda with VW easily.

        The largest impact I can see so far is in the US. But, this will blow over.

        There might even be a positive out of this. The arrogance displayed by VW head honchos might be reshaped. I’d expect not just the German government has had a quiet chat to these guys, but many in German industry.

    • 0 avatar
      notwhoithink

      To finish my though, our local VW dealer currently has Passats that MSRP at $30.6k listed for sale at $26.5k. That’s before you do any negotiating. They should be flying off the lots, but they’re not. What happens when they start trying to sell “German Passats” (same model name, improved car) for $36k+? That’s $10k more than what they’re trying to sell them for today! Sure, you might get some VW enthusiasts who are excited to finally get a “true German VW” in the US, but the millions of CamCord owners aren’t going to give it a second look.

    • 0 avatar
      duffman13

      This. I could be in the market soon, so I’ve been window shopping VWs online, knwing the issues they’re having moving metal.

      I priced some near me for fun via TrueCar, granted I qualify for all incentives based on my recent MBA. Surprisingly, they don’t have a military rebate, which I would qualify for too. $16.2k for a Jetta Sport 1.8T auto with lighting package (MSRP $23,810). $19.6k for a Passat SE with the lighting package (MSRP $28,345).

      Even accounting for the fact that I get $2k in incentives, that’s still roughly 25% off the MSRP in each case, aka a crazy amount of money off. It stands to reason you could get into a base Jetta S for around $13k with that kind of discounting. Given that, I don’t think there is any “under VW” that skoda could slide in to, at least not for the next 18-24 months.

  • avatar
    28-Cars-Later

    “The only path for VW in America is to go up, import the true German models and stop trying to be an American brand. Passat can never beat the Camry in its own game, and should stop trying. The Euro Passat can be a great alternative to Acura or Lexus, with its nicely made interior and state-of-the-art tech.”

    VW and Audi are too close to each other in the USDM, VW will never be seriously viewed as a luxury brand here as long as Audi exists. In fact, I’m truly surprised VW -given the known engineering contempt it dishes out- has survived this long.

    There is a certain element of lease-only-we-know-its-junk-snobbery in this market and I don’t know too many who participate in it who will accept a VW or Škoda in lieu of a BMW, Audi, or Mercedes for similar money +/- 30% of lease payment. I also can’t see any Lexus or Acura buyer ever being dissuaded into a VW or Škoda purchase let alone BMW/Audi/Mercedes. If Škoda came into this market and offered at least Chevy/Ford/Chrysler reliability and service costs for long term ownership, I’d say it has a fighting chance at survival. If Škoda was introduced and gave the exact level of ownership experience VW offers now, they will never be more successful than VeeDub. There are just too many better choices in USDM.

  • avatar
    danio3834

    Heck no, especially not now while VW is in deep trouble. It’s yet another brand that no one is screaming for.

    • 0 avatar
      bball40dtw

      That’s not quite fair. VW enthusiasts that buy their cars from the third owner are screaming for Skoda. They want to stance and slam some Skodas because they are running out of Euro-built VWs to ruin.

      • 0 avatar
        Hydromatic

        Those folks just want to have a badge that’s “Not Made Here” just for the novelty and snob factor. It’s the same reason why people who bought GTOs and G8s swapped the Pontiac arrowheads for Holden badges.

        With that said, Skoda will crash and burn in the U.S., if only because the non-Jalopnik/non-TTAC shopper still sees the Civic/Corolla and Accord/Camry as the safest choices in terms of compact and mid-sized family sedans.

      • 0 avatar
        bumpy ii

        Ha. Last week I saw an old-school Beetle s&s’d. It was teal, with tan sides between the fenders.

  • avatar
    Fred

    If there is a Skoda that would work in America it should just be brought over as a VW. It’s a lot of effort and money to set up a new brand and that is something that VW just doesn’t have a lot of now.

  • avatar
    Mandalorian

    It’d be a bad idea. I don’t think most Americans really associate eastern european BRANDED products with quality. The Yugo was the last eastern european car over here, not exactly a good legacy there.

    • 0 avatar
      bball40dtw

      But if it has the Audi or Porsche badge, we Americans shall purchase Eastern European vehicles! If it has the Fiat badge, no. We hate you 500L!

      • 0 avatar
        Big Al from Oz

        bball,
        Ha!

        So, why doesn’t Opel sell that well in the US?

        Like I stated above, I believe does a great job differentiating it’s different brands.

        GM is one of the worse with it’s brand differentiation.

    • 0 avatar
      Lorenzo

      That’s what good advertising is for. Skoda made some impressive artillery and naval guns for the Austro-Hungarian army and navy. Possible tagline: “more bang for your buck”.

  • avatar
    Hydromatic

    Bringing Skoda to the U.S. is more of a TTAC/Jalopnik enthusiast lusting for brands and cars that aren’t sold here. Greener Grass Syndrome and all that.

  • avatar
    seth1065

    I think Fred and sir wired nailed it rebadge the Skoda that would work here, the CUV might not sell in big numbers but it may sell in big enough numbers for a VW. maybe VW should bring a smaller car over as well to compete with the sonics and Sparks of the market, the NA jetta and Passets sold pretty well for VW when they were new, they dies on the vine, and the Pilot sized thing VW has promised since last century get it here ASAP and not at a 49K price tag.

  • avatar
    TDIGuy

    A cheaper sub-brand…

    Isn’t that how Kia started with Hyundai? That’s how it looked to me, but not sure if the general buying public ever saw it that way.

    • 0 avatar
      duffman13

      Kia and Hyundai have a weird relationship IIRC. They are independent companies, but each one owns roughly 1/3 stake in the other. They take advantage of economies of scale in shared powertrain development and basic architecture, but have their own body, suspension, and interior designers.

      Kia did wholly own Hyundai starting in the 80s, but the two brands have divorced themselves somewhat over the past 3 decades

    • 0 avatar
      MLS

      Hyundai and Kia were wholly independent companies until the late-1990s Asian financial crisis triggered the latter’s bankruptcy. Hyundai seized the opportunity to acquire 51% of its distressed smaller rival, though it has significantly reduced its stake since then. The companies continue to operate relatively autonomously. So no, Kia was never a cheaper sub-brand of Hyundai.

  • avatar
    CincyDavid

    As much as it sounds like a cool endeavor, I can’t imagine Americans buying a Czech car…too close to the good old Yugo. The Czechs build great handguns (CZ 75, etc) and presumably build OK cars, but I really think Americans lump all of central and eastern Europe together and would not differentiate between the Czech Republic and the former Yugoslavia. Picture yourself at a cookout, trying to justify why you bought a Skoda instead of just about anything else?!?

    • 0 avatar
      threeer

      Why not? We are now buying fully assembled made in China SUVs, CUVs assembled in Korea (with high Chinese content), cars and trucks made in Mexico and even a supposed “luxury” branded car made in Hungary. I doubt that the average American consumer really gives two whiffs where their car is built anymore (I do, but am solidly in the minority, it would seem). So I don’t see being produced in Czech to be an issue on it’s own. But I do see the very crowded market place being hostile to a new nameplate/brand. And any connection to VW won’t necessarily help it any, that’s for sure. They’d have to truly show themselves to be what I think VW had tried for years (and failed) to be; a lower-cost “European” alternative to Toyota/Honda, etc. I’m not sure Skoda could pull that off. The CUVs/SUVs might stand a chance, but the cars are either too small for the typical US consumer, or too close to already existing VW models that already aren’t selling very well.

  • avatar
    Steve Biro

    While I was in the UK ten-or-so years ago, I noticed quite a few Skodas on the road. I spoke to the drivers of a number of these cars and, to a one, all found Skodas to be a less expensive and a better value than VWs and – more importantly – better built and more reliable than VWs.

    I don’t know if that’s still the case but there’s no question the cost of launching a new brand in North America would likely be prohibitive for VW right now. So I like the idea of bringing in certain Skoda models and branding them as VWs. The dollar-koruna exchange rate wouldn’t hurt, either. I’d be up for a Yeti or Octavia vRS Estate myself.

  • avatar
    Felix Hoenikker

    I am one of the few Americans who actually drove a Skoda I don’t remember the model, but it was a down market model close in size to the 2005 Jetta sold in the US. Manual five speed with a 1.4L VW gas engine IIRC.
    We traded two new sets of kids golf clubs for two weeks of use of the Skoda to my daughter’s host family.
    Fortunately, we didn’t have to travel too long on any segment of the trip starting in Karlovy Vary then to Prague, Bratislava, Budapest, Vienna, Salzburg, Bavaria and back to Karlovy Vary.
    This car was cheap transportation and spartan by even Skoda standards at the time. The only option was a radio. Loaded to capacity, the performance was less than inspiring. It could reach 130 kph on the A roads, but took what seemed like 10 minutes to get there. When I pressed the pedal to the metal, the little engine would say “I think I can, I think I can”, On the plus side, it didn’t burn much fuel.
    I’m sure things have changed in the Skoda product line in the last decade. This type of car just would not sell in the US unless it was offered at a big discount relative to similarly sized cars sold here now. That being said, it was larger inside than the Fiat 500 sold here and had four doors. It would have to come over at a much higher trim and performance level at a compelling price to sell in the US.

  • avatar
    bumpy ii

    The easiest thing to do is import Skodas into the US… with VW badges and nameplates on them.

  • avatar
    Pch101

    VW’s American problems won’t be solved with another brand.

    The central problem even isn’t with the diesel snafu (that will probably prove to be a hiccup) but with VW’s desire to be a mainstream US brand while it flails with niche brand strategies in order to get there. If VW wants high volumes in the US, then it will need to radically change how it approaches the US market in ways that would shake up the corporate culture. And that change isn’t going to happen.

    • 0 avatar
      Whatnext

      I wouldn’t call the North American Jetta and Passat “niche brand strategies”. They were squarely aimed the at the centre of their respective markets. Dieselgate aside, VW’s problem is it didn’t follow them up with a credible CUV option, and it didn’t visually update the sedans frequently enough. Today’s Jetta has many improvements over the model that launched the series in 2011, yet they look almost the same.

      • 0 avatar
        Pch101

        The branding approach is niche. The combined focus on hipster appeal and its Teutonic roots is the sort of approach taken by niche marketers. German is associated in the US with expensive, not affordable or practical.

        If VW wants to be a major player in the US, then its top priorities should be reliability, reliability and reliability. Chrysler is big enough to blow that off, but VW isn’t unless it is content with staying where it is. Hyundai provides the model to copy.

        If I was running VW, then I would content myself with a niche and just make sure that the company owned it. VW isn’t going to reinvent itself as the Toyota of Europe, so why even pretend?

    • 0 avatar
      Big Al from Oz

      Pch,
      I’d bet the VW dieselgate scandal has shaken VW to the core. I’d even bet the guys running VAG would of taken stock on how all their operations are going. These guys had a rocket shoved up their a$$.

      I think the dieselgate scandal was the best thing to happen to VW.

      VW has learnt to walk, so to speak in the US.

      In the short term VW will feel the fallout, but in the longer term VW will be the better.

  • avatar
    NickS

    I find the whole idea that VW wants to become a sub-luxury brand comical. What is the point of shrinking the gap with an already well-established and very successful and desirable brand that is Audi? What is the strategy behind shoehorning VW into a $3000-below-Audi market segment? Fine if you want to increase your margins, but will they still be just as decontented, and with the same old abysmal ownership experience? How much of that can they sell with sooo many options?

    If it weren’t for the startup cost, it would be a great move to bring Skoda over, especially if they are still after that #1 spot. In fact, I am more inclined to wager that they should really look into how to amortize the startup costs over a decade of a risky, but potentially very successful budget, full-size euro car brand that sells in much higher numbers.

    The VW problem is two-fold: a) VW is shackled with historical inability to meet the us market expectations of reliability and post-sales experience, and b) VW is so tainted, and if it weren’t for all the enthusiasts over the years, every owner has moved on to another brand, never to come back. The B&B will still pounce on a current VW with a huge disco, but not in the numbers that would sustain a brand.

    TL;DR: VW is damned if they do and damned if they don’t, and that sucks for them, but not for anyone else. It is too much for them how they need to change.

    • 0 avatar
      HotPotato

      Yeah, VW tried an upmarket strategy before, and it kinda failed. There’s a reason you can no longer buy a Rolls-Roy–er–VW Phaeton, or exotic W8-powered Passat, or 10-cylinder turbodiesel Touareg, or even a nice Jetta, in the US market.

      For about a decade there, a VW was essentially an Audi without the snob tax, and everyone knew it. Great for savvy car guys in search of a steal on a great ride. Lousy for Audi’s ability to get the desired price or VW’s ability to move cars in volume.

      In the last decade, Audi marched upmarket and VW downmarket (at least in sedans). But that hasn’t quite worked smoothly. Some vehicles remained stuck in the old pricey paradigm (Touareg), some veered too far down the decontenting path (Jetta S), and some combined the worst features of both (Tiguan). And Audi had to reach back downmarket with smaller, cheaper models in the wake of the financial crisis. So the identity crisis continues.

  • avatar
    dukeisduke

    It would be cool for the name and the novelty, but the market’s already too crowded.

  • avatar
    Corollaman

    NOPE

  • avatar
    sportyaccordy

    VW put itself in a really tough position. They basically quadrupled volume when they decontented the Jetta/Passat, but that growth turned to contraction well before Dieselgate. Then Dieselgate happened.

    Never mind the fact that the Jetta & especially the Passat are in markets that are fully saturated at best (C-segment) or in slow decline at worst (D-segment). They are about 5-15 years late to the CUV party as well and still reluctant to join. I like VWs and have one in our fleet but they deserve all the failure they’re getting. I just wish there were a way the poor saps making those cars wouldn’t have to face the consequences of management.

  • avatar
    philadlj

    Bring the Yeti (and the Kodiaq) or don’t bother.

    • 0 avatar
      James2

      I bet if VW brought the Yeti over *unchanged* (except for the badge) it would become their best-seller.

      • 0 avatar
        Kenmore

        The Yeti looks like a cheap Tiguan, is that basically accurate?

        It also appears small to go up against Rogues, RAV4s and CR-Vs for family DDs. Could it possibly sell cheaply enough here (<20K) to get any notice?

  • avatar
    heavy handle

    There isn’t much point bringing Škoda over, but VWoA could learn something from Škoda.

    They provide a fully loaded car with no sporting pretense for about the same money as a mid-level VW or bare-bones Audi.

    That’s what the US Jetta and Passat were supposed to do, except that they came across as cheap. Škoda, on the other hand, comes across as good value. The difference is that VW’s design team was mailing it in, whereas Škoda’s design team works hard to take sales away from its cousins as well as form the other automotive groups.

  • avatar
    Advance_92

    If VW wanted a sub-brand or model why not import cars from Brazil, as they did with the Fox in the 80s/90s? With cars like the Yeti maybe Skoda could be positioned to compete with Subaru in that weird kind-of-premium-but-utilitarian market Subaru stole from Volvo.

  • avatar
    Big Al from Oz

    I do know here in Australia Skoda is not a “big” player, if that can be said due to our 1.2 million a year market. But, it does sell and is staying the distance.

    I read some comments above discussing a “saturated US market”. The US is far from saturated. The US has 270 000 vehicles per brand. I do believe it’s nearest rival is the Germans who have around 60 000 per brand. We in Australia have a measly 12 000 per brand. Yet these markets seem to function with little problem.

    I do believe Skoda can make it in the US as a large niche vehicle. My impression is many expect Skoda to come into the US market and take the more established players on head to head within a year or two.

    Give Skoda a chance, so if it only sells 50 000 vehicles a year it will still be viable. This gives choice to the consumer.

    It’s great for us to speculate. Success isn’t the size, number, it’s speed, etc.

    • 0 avatar
      HotPotato

      A brand can’t survive in the US market with Australian volume. Way, way too much geographical volume to cover.

      • 0 avatar
        Big Al from Oz

        HotPotato,
        If you are stating that Skoda must be in every town and city then you are correct.

        The US is geographically large enough to have different brands in different regions throughout the country and still provide competitive pricing.

        California alone is the 5th largest economy in the world. Skoda could do well if it starts up in the NE and spreads, like Wawa is now in Florida. It started out in Pennsylvania and spread to neighbouring States. The NE has a population around the size of France or the UK.

        Even here Hyundai started out in Perth back in the early/mid 80s. The city back then had a population of around 1 million people. But a network of dealers set up.

        Many people will not relate Skoda to VW. People who are enthusiastic about motor vehicles will have this knowledge.

        Even though Australia is nearly the size of the US geographically, we are one of the most urbanised nations in the world. This does make it easier for us to have more brands available than most anyone else.

        But, the numbers of some brands is tiny and yet they manage to hang in there, somehow.

  • avatar
    MBella

    I think it could work if they sold them out of Audi dealers at first. Put them into a corner of the showroom with their own salespeople. Offer or two trim levelso and sell them on value.

  • avatar
    ihbase

    Whether it makes sense may turn not on the number of brands in the US market and not on the position of Skoda in foreign markets but instead on the significance of the damage the VW brand has suffered in the US market. TTAC experts know more about post-scandal sales volume, but if the average car buyer is shying away from the VW brand in significant (and permanent) numbers, perhaps slapping a different brand on the same cars will give VAG a second shot at the same buyer.

    While TTAC readers probably scoff at such brand fiction, keep in mind that a significant part of the retail market believes that the GMC – Chevrolet brands offer substantively different trucks. And, for some reason, the industry treats those sales numbers as distinct from one another.

    So, perhaps if the damage to the VW brand is deep and too difficult to repair, slapping a new brand on the same product makes sense. I recognize the smart distinctions made between the products identified by the author above, but there is nothing that would prevent VAG from rebranding the Golf, Jetta, & Passat as Skoda products. Right? And keep in mind that brands fill different segments of markets in different countries. (Try ordering a BMW with steel rims and speed cloth in the US!) So, “Skoda” could be positioned anywhere in the US market when introduced. Right?

    It would be interesting to better understand how permanent the damage is to the VW brand in the US. Didn’t some “experts” predict that the “unintended acceleration” claims would be the end of Prius? Granted, the VW issues appear to be based in actual fraud, but the retail market seems to have a short memory. A short memory may diminish the value offered to VAG by introducing the Skoda brand to the US market.

    -Michael

    • 0 avatar
      bball40dtw

      The industry treats GMC separately from Chevy because they have different stores and GM reports the numbers separately. And it’s been like this for decades. No one believes that Silverado and Sierra are anything but the same truck with different badges and trim.

  • avatar
    Arthur Dailey

    Doesn’t VW already have a semi-premium brand in Audi? Which has sold vehicles based on lowly VW platforms as entry level luxury.

    And don’t they also own some ‘premium’ marques?

    So bringing in European VW’s at semi-premium prices would only have them competing with themselves. Much like GM did when they offered ‘premium’ Buicks and Oldsmobiles to compete with Cadillac.

    The Americanized Jetta and Passat both originally sold well in N.A. And continue to do OK in Canada. So VW should learn from that and update them regularly.

    However the sedan market is shrinking. VW lacks viable offerings in the growing markets of CUV’s, SUV’s and trucks.

    Bringing in Skoda CUV’s and SUV’s and badging them as VW’s therefore seems to be eminently sensible.

    And possibly a hot hatch priced below the GTI?

    • 0 avatar
      sgeffe

      I can remember clearly seeing an Audi A3 in England in 2000..with the identical interior to the Emm-Kay-Four Golf/Jetta! I knew, being a car nut; parents were surprised!

  • avatar
    LS1Fan

    Skoda in America could work-but only **IF** they position themselves as a bargain alternative to VW and Japanese makes with superior -not equal- reliability.

    There’s quite a few folks who want German type quality in something they can drive without worrying about tows and five digit service costs. A Skoda with the build quality of a BMW and the reliability of a 1990s Corolla would sell pretty well here, and eat VWs lunch in the process.

  • avatar
    slap

    Bringing in Skoda would give VW the GM problem – Chevy, Buick, and Cadillac. There is too little room between the top of the line trim Chevy and bottom of the line trim Cadillac for Buick to do well. The same will happen to VW with Skoda.

  • avatar

    I have a couple of bones to pick with this analysis. The conclusion isn’t going to be different though.

    One, the article focuses on cars far too much. It acknowledges the CUV situation briefly in the graf about Rapid, but then makes an emphatic proclamation that “the venture can never work” without cars. This seems woefully out of date at best. Cars are the past, CUVs are the future. Maybe already the present. Skoda does not even need to sell a car, or they may sell a token vehicle. Jeep does not sell a sedan, does it now? Neither does GMC. The key question is if Skoda has CUVs, many CUVs of various classes. If they don’t have that, they are a non-starter going forward.

    Two, the article focuses heavily on market positioning. It is important, but what did VW in was poor longevity and durability, as well as lack of mass-market CUVs. Marketing of VW cars was competent. Yes, Phaeton was a flop, but it never was intended for a volume, so it’s not like it mattered. If Skoda does worse than VW in medium term use, it’s going to be Daihatsu. That’s not a recipe for success.

    One funny anecdote is a former commenter at TTAC, whom I know outside of the site. BTW, he’s an acquaintance of Jack. Two years ago he sold his Acura and bought a diesel Jetta. He loved the handling of the car and he became a big fanboi of VW diesels. Then, 4 months ago Jetta disappeared and he drives an Optima now. When I asked what happened, he deflected my query. Two years. If that’s the lifecycle of a fan of the brand, VW has issues. And those issues aren’t in marketing.

  • avatar
    kurtamaxxguy

    Right now VW feels like a grab-bag of products, some good, some bad, rather than a coherent brand: to import only German cars seems opposed to its upscale unit, Audi, that’s about to introduce Mexican-built Q5’s and other products.

  • avatar
    Lightspeed

    I keep saying this would be a great move in Canada. Would give VW the kind of one-two punch Hyundai/KIA has here. In fact, Skoda would steal market share from the Koreans far more than cannibalize VW sales.

  • avatar
    jpolicke

    Does VW, whose own brand luster here is less than distinguished, seriously think American buyers are going to take to a brand with ZERO history in this country, coming from a part of the world for which the automotive perception is “Iron Curtain [email protected]”, when they present it as “same as a VW, only cheaper”?

    Skoda as a brand only exists today in the first place because of a stupid promise VW made to the Czechs when they took the operation over. Their continued existence makes no sense even in Europe.

  • avatar
    jpolicke

    Still hoping to hear someday how the Ducati purchase made any corporate sense. Zero technology that can be applied to the main product. Yes, it has wheels and is propelled by a gasoline engine. Under that rationale they could have bought a lawn mower brand. Just because you sell motorcycles doesn’t make you BMW.

  • avatar

    I always thought Skoda meant “last generation VW tooling recycled”.

    • 0 avatar
      HotPotato

      Which is fine though, right? Like, if I could get a magical 2002 B5.5 Passat again, but brand spanking new, at a Sonata price and with Camry reliability, I would do it in a heartbeat. That car was so far ahead of its time that it feels fully modern today. I’d much rather they reach an affordable sales price by giving me a fully amortized model, and reach quality parity by taking advantage of years of experience with the model to identify and fix all its issues, than give me a mediocre brand new model that’s just a Camry minus the reliability.

      I think a lot of this site’s US readers, including me, have long held a romanticized notion that a Skoda is basically that: yesterday’s near-luxury VW model for the price of today’s near-mainstream Korean. But alas, I don’t think it’s so.

      • 0 avatar
        derekson

        The current Skodas are miles ahead of the B5.5 Passat and would probably have price parity with Korean brands. The Octavia and Superb are on the same MQB as the excellent Mk VII Golf, as is the upcoming Kodiaq CUV.

        • 0 avatar
          JimZ

          Is MQB some sort of magic wand?

          • 0 avatar
            derekson

            No, it is a good modern platform that is a massive step forward from the old mark V platform that was also used in the mark VI cars (and still underpin the US Jetta and Passat).

          • 0 avatar
            JimZ

            The market at large doesn’t know or care what a platform is. Platforms are something only car geeks bicker about on blogs, while the people who actually buy new cars only care about the end product. And the platform doesn’t guarantee the end product will be good.

          • 0 avatar
            tedward

            Jimz

            There is a lot of hype, mostly fueled by the fact that the current mqb golfs are extremely nice inside and drive better. But, we haven’t seen a true entry price point on mqb yet so the jury remains out on what a mqb jetta s would bring to the table.

            The two things it does do so far are allow for the newer, nicer, interior appointments that the more common mounting points bring and allow for softer spring rates through better chassis rigidity and lower weight. Everything else is just inside baseball stuff that only matters to manufacturers and obnoxious consumers like us. The ace in the hole may be awd compatibility on everything going forward, but I’m not sure if that’s true in a way that’s really novel.

    • 0 avatar
      Advance_92

      “I always thought Skoda meant “last generation VW tooling recycled.”
      SEAT did that with last generation A4s. Brilliant idea, actually.

  • avatar
    tedward

    I had a great argument on this subject last week with a buddy. My take is that if Skoda is coming here it is to do battle with Subaru.
    1. VW just invested in putting their awd supplier in both of its us focused manufacturing points.
    2. Their new architecture is now in both factories and is debuting their awd push in a cuv and car.
    3. They are about to launch two north America specific suv’s and they have no brand mates here with which to share these vehicles (sure, audi on the q3/tiguan but that’s not enough, and do they even want the long wheelbase version?).

    I think launching Skoda with a uv heavy lineup and awd as a forced option on everything could absolutely work. I don’t really see the point otherwise. I don’t think the long term plan would rely on skoda’s existing lineup out of eastern europe, but rather would be focused on getting more volume out of vw’s spendy new factory expansions.

    The point in the article that vw should stop trying to out camry Toyota in the us is just wrong. By introducing Skoda they would be doubling down on that strategy, and it is the right one sales wise.

  • avatar
    darex

    SEATs look better — besting VW-equivalent models in looks. I could see SEATs selling here better than Škodas. It could tap into the large Hispanic market, too.

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