18:33 15-11-2025

How Skoda keeps margins high with Czech costs and flexible EV/ICE lines

Skoda CEO Klaus Zellmer laid out how the company is keeping profitability high despite a cooling electric-vehicle market and tougher competition. He pointed to the brand’s manufacturing base in the Czech Republic, where labor and energy costs are lower, as the decisive factor that helps sustain an operating margin of about 8%. The emphasis on local capacity reads less like a gamble and more like a pragmatic hedge.

Zellmer also said Skoda has grown sales in India and ASEAN, offsetting its exit from the Russian market. In Europe, the brand has climbed to third place by sales. The strategy leans on a broad model range and flexible manufacturing: electric cars and combustion models are built on the same assembly lines. That kind of factory agility tends to pay off when demand zigzags, allowing the brand to follow the customer rather than steer them toward a single powertrain.

He added that forecasts for a complete phase-out of internal-combustion engines by 2035 look overly optimistic and should be revisited. Skoda will continue to produce estate models, including the future production version of Vision O, a format favored by buyers who cover high annual mileages. Keeping wagons in the plan feels like a level-headed nod to real-world usage, and staying close to what customers want remains the thread that keeps the brand competitive.