Volkswagen has taken a serious hit in the United States after its diesel scandal.
Sales dropped by 17.2 percent in May and the German automaker holds less than two percent market share here.
To say that Volkswagen is struggling in the U.S. market is a huge understatement, but the company still has hopes of recovering and expanding here. Part of that recovery and expansion could mean the introduction of a brand that Americans don’t associate with scandal and lies. In fact, it’s a brand that’s mostly unknown to American car buyers.
Could Czech automaker Skoda be the answer to Volkswagen’s problems?
Skoda has been a European mainstay for more than 100 years, though it spent many of those years facing quality problems. Volkswagen took over the brand in 1991 and has given Skoda a new reputation.
Recent Skoda models have stretched the brand upward, with impressive customer-satisfaction and build-quality ratings elevating Skoda above VW in brand perception in some European markets. The brand has recorded substantial growth year over year in multiple countries, with its profit margins surpassing Audi during the first quarter of 2016.
Skoda’s lineup is similar to Volkswagen’s and company executives believe North America could be a logical choice for expansion. The automaker has already filed trademarks for two sedans and a compact SUV with the U.S. Patent and Trademark Office.
An entrance into the U.S. market would serve a couple or purposes. First, it would help alleviate sinking VW sales by giving customers another option for buying a Volkswagen Group car without getting the tainted VW brand. Secondly, Skoda has been on the lookout for new markets since Russia’s economic collapse, which has hurt sales there. The North American market could be a perfect replacement and comes at a time when buyers here might be most open to a new Volkswagen alternative.
The other part of this story is that Skoda could potentially replace Volkswagen altogether in the United States. An Automotive News story said,
Ferdinand Dudenhoeffer, director of the Center for Automotive Research at the University of Duisburg-Essen, said VW Group should withdraw its core VW marque from the U.S. because it is so tainted by the emissions scandal and replace it with Skoda.
The big question, of course, is whether or not Skoda can make the business case to enter the already saturated U.S. automotive market. The odds of success would probably be better if Volkswagen wasn’t in the picture.
Could Skoda replace Volkswagen in the United States?