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Skoda Auto AS, which is owned by German carmaker Volkswagen AG, said it will produce two more models in China to enhance the expansion of its brand in the world's third-largest auto market.

 

The Czech-based company said it has signed additional contracts with Volkswagen and its domestic venture in the middle of this month to produce the Fabia and Superb in addition to the Octavia sedan in China.

 

The extended license-based production is expected to enable the company to reinforce the expansion of the Skoda brand in the Chinese market, which is increasingly turning into a heated battle ground for all carmakers.

 

"We see China as one of the strategic markets for the brand's future growth," according to Detlef Wittig, board chairman of Skoda, yesterday.

 

All the three Skoda models would be made at the plant of Shanghai Volkswagen, Volkswagen's venture with Shanghai Automotive Industry Corp, and will target the domestic market.

 

The domestic production of the first model, Octavia, is set to start from the beginning of next year, with the Fabia and Superb following later, Shanghai VW told Shanghai Daily without elaborating on the timetable.

 

A Skoda Auto team is already working in Shanghai to prepare the launch of the project while Skoda vehicle sales and maintenance services will also be provided through a selected network of exclusive Skoda dealers in China.

 

The localized production also marks the start of Shanghai VW's brand strategy in China to boost its competitive strength against other market rivals such as Shanghai General Motors.

 

Shanghai VW now rolls out a line-up of five models - Polo, Passat, Santana, Gol and Touran - in China with an annual production of over 3 million units.

 

SVW, which lost ground to Shanghai GM for the first time in car sales in 2005 due to a smaller line-up of models, is betting on the new brand to expand its portfolio and win back market share.

 

(Shanghai Daily June 22, 2006)