Škoda’s Profits Drop By One Third In First Six Months of 2022
The decrease in revenues is blamed on rising production costs and reduced availability of raw materials, as well as the Russian invasion of Ukraine. Photo credit: Freepik
Czech Republic, 15 Aug. (BD) – ŠkodaAuto has announced a fall in profits of over 30% in the first six months of 2022, with operations strongly affected by the post-pandemic economic disruption and the invasion of Ukraine by Russia, which is the company’s second largest market.
Volkswagen, the parent company of ŠkodaAuto, released its latest performance results showing losses due to rising production costs and unfavourable exchange rate trends. Results were also affected by the conflict in Ukraine and the availability of raw materials. Škoda Auto’s operating profit for the first six months of this year thus fell to 676 million euros (CZK 16.6 billion) from 974 million euros (CZK 23.9 billion) a year earlier.
From January 1 to June 30, direct-to-customer deliveries of Škoda vehicles totaled 360,559, compared to 515,277 in the first half of 2021, a difference of almost 160,000 units. Škoda’s total sales were 447,000 vehicles, down 3.5 percent from the previous year. The decline in sales in Europe was partly offset by growth in India. In particular, sales of the Enyaq iV model increased.
Škoda has also been honoured with several awards in recent months. In April, Škoda’s Enyaq iV won the Best Value Electric Car award. In mid-May 2022, Škoda’s Fabia received the Red Dot Award in the product design category. This is the 17th time Škoda has won this award in one of the world’s best-known design competitions, considered the seal of high-quality product design. The international jury of experts consists of independent designers, design professors, and trade journalists.
Škoda Auto operates three production sites in the Czech Republic, but also produces in China, Slovakia and India, mostly through group partnerships, as well as in Ukraine and Kazakhstan in cooperation with local partners. The company operates in over 100 markets. In early March, Škoda Auto announced that, due to the Russian invasion of Ukraine, it would suspend production at Russian production facilities in Kaluga and Nizhny Novgorod and stop exporting cars to Russia. Until last year, Russia was its second largest market.
Overall, parent company Volkswagen’s operating profit increased 16.1%, over 13 billion euros in the first half of the year. Sales increased 2% to 132.3 billion euros.