Škoda maintains auto sales lead

Škoda Auto Slovakia, the country's largest auto seller, is still cruising along smoothly in top market gear. The only cloud on the horizon, say Škoda officials, is the possible reintroduction of import restructions, mooted by the new Finance Minister on October 19.
Brigita Schmögnerová, the new minister and a deputy for the reformed communist SDĽ party, said that Slovakia's soaring trade balance deficit would require the adoption of "short term measures focusing unfortunately on certain import restrictions."
"The possible implementation of an import duty is unacceptable," said Škoda marketing manager Ilja Majda. "If it is implemented, however, Škoda will maintain its current prices for consumers."

Škoda Auto Slovakia, the country's largest auto seller, is still cruising along smoothly in top market gear. The only cloud on the horizon, say Škoda officials, is the possible reintroduction of import restructions, mooted by the new Finance Minister on October 19.

Brigita Schmögnerová, the new minister and a deputy for the reformed communist SDĽ party, said that Slovakia's soaring trade balance deficit would require the adoption of "short term measures focusing unfortunately on certain import restrictions."

"The possible implementation of an import duty is unacceptable," said Škoda marketing manager Ilja Majda. "If it is implemented, however, Škoda will maintain its current prices for consumers."

Martin Kábat, a stock analyst with Slavia Capital brokers, explained that a new import duty would not necessarily hurt Škoda's market share, as all car importers would be affected. A duty would, however, cut into sales of Škoda products, which are at an all-time high.

During the first nine months of 1998, 53,623 new cars were sold in Slovakia, according to official figures provided by the Slovak Automotive Industry Association.

During the monitored period, Škoda ranked as the most bought car brand in Slovakia, selling 21,925 cars for a commanding 40.89% market share of the market. The company's closest competitors were Daewoo (7,112 and 13.2%) and Volkswagen (3,734 units and 6.96%), followed by Opel (2,858, 5.33%) and Fiat (2,672, 4.98%).

Škoda Slovakia director Štefan Chudoba said 1998 had been a bumper year for his company. "In 1998, our profit will be 3.5 billion Sk ($97 million), which is a record. Next year, we expect to increase our profit to 3.8 billion Sk." According to Chudoba, "we will have sold 33,000 new cars by the end of this year which is a 44% share of the market."

Chudoba explained that Škoda is divided into two main branches: purchase and sales. The purchasing branch buys car parts from 27 different factories in Slovakia for assembly in the Czech Republic, meaning that no Škoda cars are produced in Slovakia.

The Slovak parts factories employ a large majority of Škoda Slovakia employees, who currently number some 25,000. Among the products produced in these factories are "bearings, clutch pedal parts, fuse panels, rear-view mirrors, and formed and unformed sheet metal," explained Škoda representative Ján Pribula.

The possible import duty notwithstanding, Chudoba was generally upbeat about doing business under the new government. "I think that the new government will work for a better future for the Slovak people, for a future in the European Union. It will create new economic policies - not restrictive policies - so that we can, in the future, begin to cooperate with the whole world."

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