Skoda, a division of Volkswagen, surpasses all others in customer satisfaction - here's what makes their customers happy
Skoda Outshines VW Group Subsidiaries, Achieving Record Profits
In a surprising turn of events, Czech automaker Skoda has outperformed other Volkswagen Group subsidiaries, including luxury brand Porsche, in terms of profit and growth. This success can be attributed to several key factors, including strategic market expansion, strong financial performance, and a focus on electric and plug-in hybrid vehicles.
In the first half of 2025, Skoda Auto reported a 13.6% year-on-year increase in vehicle deliveries, with revenue rising 10.4% to €15.07 billion and operating profit up 11.8% to €1.285 billion. The company's return on sales remained robust at 8.5%. Skoda's impressive growth has even propelled it to become Europe's third best-selling car brand, reflecting its significant market presence and growth ambition to remain in the top three by the decade's end.
One of the main contributors to Skoda's success is the strong demand for electric and plug-in hybrid vehicles. In Europe, Skoda delivered 72,000 electric vehicles and 21,400 plug-in hybrids, accounting for nearly 23% of its total deliveries. This effective alignment with the shift toward electrification has been a strategic advantage for the company.
Another significant factor is Skoda's geographical market expansion, particularly in Asia. The company substantially grew its presence in India, where vehicle deliveries more than doubled (year-on-year growth of 107.7%). The launch of locally produced models like the Kushaq SUV in Vietnam exemplifies this approach.
Skoda's competitive product positioning and cost efficiency also play a crucial role in its success. The company generally offers competitively priced vehicles with a strong balance of performance, features, and cost of ownership compared to other VW Group brands and competitors with similar engine and performance specs. Additionally, Skoda vehicles tend to have lower maintenance and running costs, contributing to overall value perception and profitability.
In contrast, Porsche, while a premium brand with higher margins, operates in a smaller, more niche market segment focused on high-performance luxury vehicles. This limits volume-driven growth compared to Skoda's mass-market strategy. Thus, Skoda's combination of volume growth, electrification strategy, market expansion, and cost efficiency underpins its outperformance in profit and growth amid VW Group subsidiaries.
While VW Group's second quarter results have disappointed expectations, with significant drops at VW, Audi, and Porsche, Skoda has managed to buck the trend. The company achieved an operating result of 739 million euros in the second quarter, setting a record. Skoda's Enyaq model, for instance, has been praised for teaching VW a lesson.
Many customers attribute Skoda's success to its strategic decisions and the right timing of car releases. The company's focus on the European market, avoidance of problems in other markets like China and the USA, and addition of SUVs and electric cars to its model range have all contributed to its ongoing success.
Ferdinand Dudenhoeffer, an auto expert, has described the current situation at VW as a "world turned upside down." Porsche, once a shining star in the VW group, is increasingly becoming a problem child. In the second quarter, Porsche saw a 91 percent drop in operating profit.
Skoda's success can also be attributed to "hard work" and systematic development over the last few decades. The company made its first profits ever in 1996 with a margin of just 0.3 percent. Today, Skoda's design, workmanship, and performance are appreciated by customers, setting it apart in the competitive automotive market.
In the subsequent years, Skoda's profitability and growth continued to outshine other Volkswagen Group subsidiaries, even penetrating the finance and transportation industries. The company's strategic electrification plans, extensive market reach, and cost-effective vehicles proved valuable in the expanding automotive market.
Moreover, Skoda's focus on electric and plug-in hybrid vehicles not only established its competitive edge in the European market but also positioned the brand as a leader in the industry's transformation towards sustainability.
