OREANDA-NEWS. SKODA will be strengthening their presence on the Chinese automobile market in cooperation with its longstanding Chinese joint venture partner SAIC VOLKSWAGEN Automotive Company Limited. This will involve expanding the model range and investing in pioneering automotive technologies. On the occasion of a state visit of the Chinese President Xi Jinping to the Czech Republic on 29 and 30 March 2016, a memorandum was signed among VOLKSWAGEN, SAIC MOTOR CORPORATION LIMITED and SKODA AUTO in the presence of the Chinese and Czech President. Under the agreement, Joint Venture SAIC VOLKSWAGEN Automotive Company Limited plans to invest around EUR 2 billion over the next five years in the development of SKODA’s model range in China. This amount also includes expenditures for pioneering electric drive concepts, the connectivity of SKODA cars to the Internet and the digitization of individual mobility. In addition, the companies VOLKSWAGEN, SAIC MOTOR CORPORATION LIMITED and SKODA AUTO also determined that, subject to approval by the Chinese authorities, SKODA would assume an equity position in Joint Venture SAIC VOLKSWAGEN Automotive Company Limited.

"Since entering the market nine years ago, SKODA AUTO has made some very positive developments on the Chinese auto market, which has since become our largest single market," says SKODA CEO Bernhard Maier. "We owe this success to our attractive model range and the very constructive and friendly cooperation with our longstanding Chinese partner SAIC VOLKSWAGEN Automotive Company Limited," said Maier. "With today's agreement we'll be strengthening our brand's presence on the Chinese market. In the coming years, we'll rapidly expand SKODA's offering to include forward-looking vehicle concepts and modern technology. Our aim is to double SKODA deliveries in China by 2020. For this, we're now laying the foundations together with SAIC Volkswagen." The focus will be on expanding SKODA’s model range and investing in pioneering automotive technologies. The show car VisionS recently gave the start signal for the SUV campaign as well as innovative electric drive systems on the Chinese market. With respect to SKODA's planned equity interest in the Chinese Joint Venture, Maier said: "We are pleased that we will be able to significantly strengthen our brand’s presence in the Chinese market through this interest in the Joint Venture SAIC VOLKSWAGEN Automotive Company Limited. The equity interest in the company is the basis for the independent branding of SKODA cars and consequently the SKODA brand's profiled staging in China."

SKODA is currently preparing a comprehensive SUV campaign for the Chinese market with the Joint Venture partner. In relation to this, the SKODA VisionS design study will be presented to the Chinese public for the first time at the end of April at the automotive show in Beijing. The VisionS provides a glimpse of the new large SUV SKODA model whose launch in China is planned for the first half 2017. As part of the SUV campaign, another body variant of SKODA’s large SUV is already in development. In addition, the brand intends to bring out a crossover utility vehicle (CUV) for China.

Chinese customers' interest in modern SUVs has been demonstrated through the sales of the SKODA Yeti, which is produced at the Anting plant with a six-centimetre longer wheelbase compared to the European version, increasing more than 300% in the first two months of 2016 compared to the same period last year.

"With their passionate commitment to China, SKODA and the Joint Venture SAIC VOLKSWAGEN Automotive Company Limited play an important role in the Group's strategy," says Prof. Dr. Jochem Heizmann, Member of the Board of Volkswagen AG, and President and CEO of the Volkswagen Group China. "The investment of around two billion euros is a strong signal for the future research and development of new vehicle concepts and environmentally friendly technologies in China. The agreement between the two partners is an important step towards the future."

SKODA was one of the car pioneers on the Chinese market. As early as 1936, the brand maintained five commercial agencies in China. In more recent years, SKODA AUTO relaunched vehicle production in China in mid-2007 with SKODA Octavia – the heart of the brand. In close cooperation with their partner SAIC VOLKSWAGEN Automotive Company Limited the production of the small car Fabia began the following year at the plant in Anting near Shanghai. The millionth SKODA produced in China rolled off the production line in July 2013. The Czech automobile manufacturer’s models are currently built also at the Chinese SAIC VOLKSWAGEN plants in Nanjing, Yizheng and Ningbo. To date, the company has sold over 1.7 million vehicles in China. By assuming an equity position in the SAIC VOLKSWAGEN Automotive Company Limited, SKODA is again broadening the company's position in China.

Since 2007, SKODA's deliveries to customers in China have increased from 27,300 to 281,700 vehicles in 2015. This currently corresponds to around a quarter of the brand’s total sales. China has been the most important single market worldwide for SKODA since 2010. In 2012 the Czech automaker had three series on the Chinese market; now the traditional brand has six different model series – from the SKODA Fabia through to the new SKODA Superb.