Skoda now claims to have the best profit margins on vehicle sales of any Western volume car maker off the back of a record year for sales revenues and profits.
In 2024, Skoda’s 926,600 new car sales (a 6.9% year-on-year increase) generated €27.8 billion (£23.4bn) in revenue and an operating profit of €2.3bn (£1.9bn). Skoda CEO Klaus Zellmer said the Volkswagen Group brand’s margin of 8.3% made it “the most profitable Western car brand" in the mainstream market, "in terms of a return on sales”.
In a media briefing announcing the results, he also said: “It gives us a strong, fundamental confirmation of our business model being resilient in such challenging times and, of course, strong confidence to also keep the success on track.”
Skoda is now Europe’s fourth largest car maker, rising three places from 2023. The UK, France, Italy and Spain all saw record years for sales for Skoda in 2024. The Skoda Octavia remains its best-selling car.
Zellmer said the improved profitability was the result of not only an increase in sales and “a very favourable product mix” but also the successful implementation of its ‘Next Level Efficiency+’ programme, which is designed to keep all powertrain options open to customers while still reducing its CO2 emissions.
For the foreseeable future, Skoda will continue to offer parallel ranges of electric cars and combustion-engined models to maximise customer choice and it will strive for price parity between similarly sized models, even if that means a dent in profit margins.
“Giving you the example with Elroq and Karoq, the profit margin on the Karoq is bigger, even though the customer has price parity so can choose between the two,” he said, adding that all electric Skodas are still profitable for the company.
However, Zellmer said reducing CO2 emissions is a “responsibility” and not just a legislative requirement. There will also be no slowdown in the rollout of electric vehicles even if legislation is softened and consumer demand continues to wane because Zellmer said Skoda is “deeply convinced about the responsibility to drive down CO2 emissions”.
He said: “We will not slow down because we are invested and we are convinced that the future is electric, but we cannot overrule consumer sentiment.”
On that last point, Skoda will continue to invest in its combustion-engined models, including improvements to the Fabia, Scala and Kamiq to keep them in production for longer and meet updated emissions regulations.
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