Skoda looks for way out by decentralizing operations

Thorsten Jaede, president of Skoda China, told China Daily last week that 2021 has been one of "the most difficult and challenging" years for the company.

Jaede was appointed in July and his fundamental mission is to bring the marque back to the right track in China.

The German has spent around 15 years in the country working at different positions within Volkswagen AG and is thus deemed one of the automotive executives that really know China well.

"I have been living here for 14, 15 years and I am still learning about this country. And that has helped me learn about the diversity of this country," said Jaede.

"The problem in Northeast China is different from in Northwest China, and the network in South China is probably very different from Beijing.

"So my understanding is that there is more than one market. Yes, they aggregate to one big number but in every province you have different cities where the markets are so diverse and there are so many different dynamics," he said.

That understanding has allowed him to push the company to shift the focus to serve those who are at the front.

Instead of national campaigns, Jaede said Skoda will allocate most of its resources to regional events and work together with local dealerships to reach car buyers.

"This is one big change in our market strategy: we must be very, very local, and very close to our dealers and then very close to our customers out there,' said Jaede.

Skoda's joint venture in China has also streamlined its operations to make them better focused on serving the dealerships.

"So the mindset is changing: we must be really focused on local business around our dealerships," said Jaede.

He expects the moves will bring about positive results soon, "by the end of the first quarter and the beginning of the second quarter next year," although Jaede was quick to add that the premise is the global chip shortages will not deteriorate.

Skoda entered the Chinese market in 2005 and its cumulative deliveries in the country reach 3 million units so far.

lifusheng@chinadaily.com.cn