After suffering a loss of about 700 million euros ($742 million) due to the effects of Moscow’s conflict in Ukraine, the Czech automaker Skoda Auto, a subsidiary of the Volkswagen Group (VOWG p.DE), is in the final stages of leaving Russia, according to its CEO on Thursday.
The interruptions brought on by the conflict and the Western sanctions placed on Russia have severely hurt Skoda’s operations in Russia, which are the cornerstone of the Czech Republic’s industrial production.
The automaker said on Thursday that the significant rise in material costs and supply chain bottlenecks worldwide contributed to an 11.7% decline in net profit to 489 million euros in 2022.
In 2022, Skoda delivered 18,300 automobiles in Russia, down from 90,400 in 2021, when it was Skoda’s second-largest market.
CEO Klaus Zellmer stated at a live-streamed annual press conference that “the talks (on the sale) are in the last stages, but I can’t give you details until all parties agree.
He stated that Skoda planned to compensate for lost Russian output at its other factories worldwide.
Thomas Schaefer, CEO of the VW brand, made similar remarks on Thursday.
Martin Jahn, the board member responsible for sales at Skoda, stated that output and sales should outpace those of the previous year when international deliveries fell to 731,300 vehicles.
Skoda’s planned foray into the Vietnamese market, where it will begin selling its vehicles in the second quarter, might aid in this endeavor. Jahn calculated that there might initially be 30,000 automobiles.
Moreover, Skoda will assume strategic supervision of Volkswagen’s growth in South East Asia.