Skoda, a subsidiary of Volkswagen, outpaces others in customer satisfaction - reasons explained
In a surprising turn of events, Czech automaker Škoda has outperformed its sister brands Volkswagen (VW), Audi, and Porsche in terms of operating profit. This success is largely due to strong sales growth, particularly in key markets such as Europe and India, and a significant increase in demand for electric and plug-in hybrid models.
Škoda's operating profit for the first half of 2025 stood at €1.285 billion, with a return on sales of 8.5%. This is in contrast to the Volkswagen Group's operating profit margin, which fell to around 4.2% in the same period.
Factors Contributing to Škoda's Success
Several factors have contributed to Škoda's impressive performance. Firstly, the brand increased vehicle deliveries by 13.6% year-on-year, with particularly strong growth in Western Europe and India.
Secondly, Škoda's shift towards electrification has been successful. Electric and plug-in hybrid models accounted for 22.8% of Škoda’s total deliveries in H1 2025, more than doubling the share compared to the previous year.
Thirdly, Škoda's improvements in product design, quality, and technology have enhanced its market competitiveness, helping it gain market share even as other brands in the group faced tariff-related cost pressures and complex transitions to electric vehicles.
Lastly, Škoda's strategic positioning in more price-sensitive and growing markets has helped it maintain profitability, while the Volkswagen Group as a whole has faced headwinds from tariffs and market challenges.
Criticism of VW's Management
The success of Škoda contrasts sharply with the struggles of VW, Audi, and Porsche. Criticism has been directed towards VW's management, with some suggesting that greed may have played a role in their downfall. The second quarter results at VW have disappointed management and shareholders, with Porsche seeing a 91% decrease in operating profit in the same period.
Škoda's Strategic Decisions
Škoda's strategic decisions, such as focusing on the European market and systematically developing its model range to include SUVs and electric cars, have been praised. One user commented that Škoda brings "the right cars at the right time" with "appealing design, good workmanship, and the required performance."
Another reader praised Škoda's strategic decisions, specifically focusing on its strong performance in key markets and its successful electrification efforts. Many customers do not view Škoda's success as a coincidence.
Lower Costs and Impressive Development
Škoda's success can also be attributed to lower production costs, lower wages, lower energy prices, fewer taxes, and better prices for components. This, combined with hard work and impressive development over the past decades, has positioned Škoda as a strong contender in the automotive industry.
In summary, Škoda's stronger operating profit compared to VW, Audi, and Porsche stems from robust growth in key markets, successful electrification efforts, and competitive product offerings, allowing it to maintain higher profitability even as the Volkswagen Group as a whole faced headwinds from tariffs and market challenges.
Financial success in the transportation industry has seen Škoda, an automotive brand, surpass its sister companies Volkswagen (VW), Audi, and Porsche in terms of operating profit. This profitability can be attributed to lower costs, lower wages, lower energy prices, fewer taxes, and better prices for components. On the other hand, the finance sector, which includes VW, has faced headwinds due to tariffs and market challenges.
