“To have an overview of SKODA"

1. 1
A PROJECT
ON
“To have an overview of SKODA”
In the subject Economics of Global Trade and Finance
SUBMITTED TO
UNIVERSITY OF MUMBAI
FOR SEMESTER-II OF
MASTER OF COMMERCE
BY
SUNITA KUMARI YADAV
MCOM PART-I AND ROLL NO- 1890
UNDER THE GUIDANCE OF
Mrs. Rinkoo Shantnu
YEAR- 2012-2013

2. 2
DECLARATION BY THE STUDENT
I, SUNITA KUMARI YADAV student of M COM PART-I Roll
Number 1890 hereby declare that the project for the Paper Economics of
Global Trade and Finance titled,
“To have an overview of SKODA”
Submitted by me for semester-II during the academic year 2012-2013, is
based on actual work carried out by me under the guidance and
supervision of Mrs. Rinkoo Shantnu.
I further state that this work is original and not submitted anywhere else
for any examination.
Signature of Student
EVALUATION CERTIFICATE
This is to certify that the undersigned have assessed and evaluated the
project on
“To have an overview of SKODA”
Submitted by SUNITA KUMARI YADAV Student of M COM Part-I.
This project is original to the best of our knowledge and has been
accepted for internal assessment.
Internal Examiner External Examiner vice principle

3. 3
PILLAI’S COLLEGE OF ARTS, COMMERCE & SCIENCE
Internal Assessment: Project 40 Marks
Name of Student Class Division Roll
Number.
First Name: SUNITA KUMARI
M COM
Father’s Name: BBS PART I 1890
Surname: YADAV
Subject: Economics of Global Trade and Finance
Topic for the Project:
“To have an overview of SKODA”
Mark Awarded Signature
DOCUMENTATION
Internal Examiner
(Out of 10 Marks)
External Examiner
(Out of 10 Marks)
Presentation
(Out of 10 Marks)
Viva and Interaction
(Out of 10 Marks)
TOTAL MARKS (Out of 40)

4. 4
CHAPTER
NO. TOPICS
PAGE
NO.
1. Introduction 1
2. History 2
3. Background In India 3
4. Product
 SKODA Model In Production 4
 Discontinued SKODA Model 7
5. Seeking The Best
(Interview Mr. Bohdan Wojnar)
8
6. The Financial Year In Review 2011 12
7. Economic And Market Development 14
8. Key Step Toward Strategic Planning 17
9. Conclusion 19
10. Recommendation 20
11. Bibliography 21

5. 5
January 25TH
, 2013
The Project coordinator,
Panvel,
Navi Mumbai
Dear Sir,
As a part of Mumbai University curriculum our bonafide student Ms. SUNITA
KUMARI YADAV, Roll No. 1890 studying in MCOM would like to undergo a
project works in the topic of “To have an overview of SKODA”.
Kindly advice and allow her to do the same.
Thank you.
Yours faithfully,

6. 6
INTRODUCTION
Skoda Auto India Pvt Ltd.
Skoda Auto is a part of the International Volkswagen Group whose controlling
stake is owned by Porsche SE . It is one of the premier automobile
manufacturers in Europe, based in Czech Republic. The company introduced
itself on November 16th, 2001. With its Greenfield plant in Aurangabad, the
company has its dealership network spread over Mumbai and Delhi region.
The brand Skoda Auto is globally known for its stylish looks, well built
exterior and its constant endeavor to introduce modern technologies. The
company has already introduced 16 luxury models in Indian market.
It sells cars under the brand name of Skoda. According to an official release,
Skoda Auto India sold more than 16,000 units in the 2008, a 28.5% increase
from 2007 sales totals
Despite a dip in global automobile sales, Skoda India managed to sell 17000
units of its vehicles in 2008, with growth registered 33.2 % from previous year.

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HISTORY
At the beginning of December 1895 the mechanic Václav Laurin and the book-
seller Václav Klement, both bicyckle enthusiasts, started manufacturing
bicycles of thein own design, patriotically named Slavia in the nationalist
atmosphere of the ond of the 19th century. A few years later, in 1899, the
Laurin & Klement Co. began producing motorcycles, wich were soon succesful
and gained several racing victories. After initial experiments at the turn of
century, producing of motorcycles was gradually replaced by automobiles form
1905 onward.
Based on the traditional production processes and past success, the
Czechoslovak economy managed to maintain a relatively good standard in the
post/socialist period for several decades, in spite of the changes brought about
by planned economy and efforts at unduly rapid growth. This standard only
became questionable towards the end of the 1960’s due to development of new
technology in the western world. The permanent stagnation of the economy
started after the 70’s, also affecting the SKODA automobile manufacturer in
spite of the company’s leading position in the East Europe marker. Production
grew again only when the model range Skoda Favorit went into production in
1987.
After the political changes of 1989, under the new market economy conditions
the Government of the Czechoslovak Republic and the management of Skoda
began to search for a strong foreign partner whose experience and investments
would be capable of securing long-range international competitiveness of the
company. In December 1990, the Government decided on cooperation with the
German Volkswagen Group.

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BACKGROUND IN INDIA
Skoda Auto India started its operations in India on November 16, 2001. They
opened their manufacturing unit in Shendra, on the outskirts of Aurangabad thus
setting their foot on the Indian soil. The first Skoda car which had hit the Indian
roads was the Skoda Octavia which was priced at 10.6 lakh INR. Skoda Octavia
is a medium sized car and gained popularity for two primary reasons, first being
the fact that the car had 100 percent import content and second reason that the
model was available in both petrol and diesel version. The Octavia is being
imported to India as semi-knocked-down kits and assembled at the company's
Aurangabad plant. The plant currently assembles 10 cars a day and operates on
a single shift. The indigenization level is planned to be around 10 per cent by
2002-end. In spite of being somewhat highly priced, the Skoda has received a
tremendous response in the Indian market. Hence Skoda Auto has plans to
launch its three luxury cars Elegance, Laurin and Klement, and Superb in India
in 2002-03 with the market trend and inclination of the economy to spend
generously to own a luxury car.
Skoda is targeted a 17-18-per cent share of the combined C- and D-segment
volume in India in 2003. Skoda, which made an initial investment of $15
million in the Aurangabad facility, invested $56 million more in due course of
time for higher level of localization which in turn would bring down the cost of
the cars manufactured.
In April 2007 Skoda (VW group) invested $912m to expand its plant at
Aurangabad & Chakan plant at Pune to accommodate the production on
Volkswagen, Audi and Porsche. In 31st
march 2009 chakan plant was ready
and Skoda announced localization level increased to 50% from 15%.

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PRODUCT

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SKODA INDIA OFFERS THE FOLLOWING CARS,
SKODA FABIA
The sleek looking Fabia is the first Super Hatch in India with a huge passenger
and cargo space designed with premium looks. It has all the comforts and
roominess of a big luxury car and at the same time it is so compact that you can
drive it and park it with utmost ease in the most congested areas.
This super hatch that combines looks with performance and economy is
available in petrol and diesel variants. It packs quite a punch every time it hits
the road.
SKODA OCTAVIA

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Octavia is an orderly design with no unwanted mass. It’s more about straight
lines than about curves. It looks very European with the subtle nose section and
high waistline. The build quality is as good as it can get and is faintly reflected
in the way the Octavia looks. While seated in the rear, you will have limited
legroom but the story is completely different at the front as the seats at front are
enormously accommodating. The quality of the interior is quite good and it
exudes a tough feel.
SKODA LAURA
Skoda Laura, a stable mate of Skoda Octavia, Laura is popular for its
contemporary, dynamic designer looks. Specially customized, the model has
stood the test of times in Indian conditions with its extraordinary performance
giving results beyond imagination. Skoda (Sedan) The Skoda Laura with its
diesel variants targets the middle class consumer with Skoda car prices between
rupees sixteen and nineteen lakhs, it is available in 3 engine options

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SERVICE
In India, Skoda parts are not sold in the open market and are only
available from Škoda Auto India authorized dealers; Skoda currently has
61 dealerships across India, but plans to expand to 65 dealerships by the
end of 2009.
Service for Skoda car
Warranty for Skoda products
In accordance with the warranty conditions Skoda offers following warranty
• 2 - Year warranty on New Skoda vehicles for unlimited kms
• 2 - Years warranty on Skoda Genuine Parts and Skoda Genuine
Accessories for unlimited kms.
• The warranty will be honored by authorized Skoda dealership

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SEEKING THE BEST
Growth and internationalization will determine how
ŠKODA AUTO develops over the coming years.
How will the Company meet the challenges this
creates in the field of human resources?
> An interview with Bohdan Wojnar, member of
the Board of Management of ŠKODA AUTO for
Human Resources Management.
Mr Wojnar, internationalization is central to the ŠKODA AUTO growth
strategy. What does that mean for Human Resources?
> In the future, more than ever before, a company’s competitiveness will be
decided by the capabilities, motivation and loyalty of its employees. Those that
recruit the best talents will have a competitive edge over the long term. You can
see that quite clearly in the automotive industry. Our goal must be to become
one of the most attractive employers – not just in the Czech Republic, not just in
Europe, but worldwide.
 How do you recognize an attractive employer?
> There are many different criteria – but you can mostly tell from the number of
people applying for a job on a speculative basis. More than 21,000 people
applied to our Company last year. That means that SKODA AUTO is already an
attractive company for many people today. That‘s good, but it is just the
beginning for us.
We have an ambitious plan – which is why we must continue to work on
becoming more attractive as an employer. It is not just a matter of winning over
potential applicants. Employer branding is built on the reputation of the

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Company. We are part of society, and so we have always assumed
responsibility at a local level. The quality of life at our locations, maintaining
good relations with our neighbors’ – and, naturally, good cooperation between
management and labour, based on trust – all of those are key aspects that make
a company attractive. And, of course, we also benefit from being part of the
Volkswagen Group: Anyone who works for SKODA AUTO can pursue a
career within one of the world’s largest automotive groups. That benefits both
the Company and its employees equally.
 You mentioned a substantial increase in job applicants. What led to
this positive development?
> In recent years, we have deliberately invested in improving our recruitment
quality and have expanded our personal marketing activities significantly. We
are exploiting the opportunities offered by the internet in particular – from
special recruiting websites to YouTube, where our recruiting campaign, for
which we received two awards, is also online.
But, most importantly, we have stepped up our activities outside the Czech
Republic. Although SKODA AUTO has an excellent reputation at home, the
Czech labour market alone is unable to meet our complex personnel
requirements.
For that reason, we are also specifically targeting university graduates in other
countries. In Eastern Europe, in particular, there are many experts we would like
to recruit for SKODA AUTO. And, of course, working closely with prominent
universities and colleges worldwide will continue to be a priority. The most
recent example is our cooperation with Tongji University in Shanghai – which
is set to benefit both parties enormously.

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 Won’t this development be detrimental to employees in the Czech
Republic? Will jobs be transferred to the growth markets?
> No, quite the opposite: It is global growth that secures jobs at our Czech
facilities. The Czech Republic is, and will always remain, our domestic market
– it is, after all, where our Company has its roots. 1,850 new jobs were created
here in 2011, but our future will depend upon opening up more to the rest of the
world. National borders should not prevent us from participating in global
competition. We all need to be open to new ideas and solutions. All of our
employees are required to systematically enhance their skills, which also – at an
individual level – improves their prospects within the Company. That also
includes being prepared to work for our Company abroad for a period of time.
We currently have more than 150 employees doing just that – and that number
will continue to grow over the coming years. At the same time, the
internationalization of SKODA AUTO is also evident at our Czech locations,
where we employ people from 37 different countries. So you see, there are
always two sides to internationalization.

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THE FINANCIAL YEAR IN REVIEW
The 2011 financial year was the most successful in the history of ŠKODA
AUTO Group. The Group achieved new sales, revenue and profit after tax
records. It also reached important milestones in the implementation of its
growth and internationalization strategy.
A total of 879,184 ŠKODA automobiles were delivered to customers in 2011,
exceeding the previous year’s record high by 15.3%.
This sales success is rooted in highly-efficient production. More ŠKODA-brand
vehicles were built in 2011 than ever before in the Company’s history. Global
production of ŠKODA-brand vehicles reached a new record of 900,628 vehicles
– an increase of some 118,000 units over 2010 (+15.0%). ŠKODA AUTO also
delivered numerous parts for other brands the Volkswagen Group and
confirmed its position as an important pillar of the Volkswagen Group’s global
production network.
The number of ŠKODA AUTO Group employees rose to 26,565 by the end of
2011. This represents an increase of 7.5%.

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Financial strength as the basis for further development
Bolstered by an increase in sales and an improved model mix, the Group’s sales
revenue and earnings also rose. The cost situation was also improved and net
liquidity increased. This provides ŠKODA AUTO with a solid foundation for
further investments in new products, capacity and markets.
ŠKODAAUTO’s Group revenue rose by 15.1% to reach CZK 252.6 billion –
another new record. The operating result reflected this positive development
and, at CZK 18.3 billion, easily exceeded the previous year’s figure, with an
increase of 61.3%.Consolidated profit after tax climbed 81.9% to CZK 16.1
billion. The Group’s net liquidity climbed to CZK 47.3 billion – an
improvement of 17.7% year-on-year. Capital expenditure (without capitalized
development costs) for the year 2011 totaled CZK 14.2 billion.

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ECONOMIC AND MARKET DEVELOPMENT
 World economic situation dominated by debt crisis
Global economic trends were mixed in 2011. First and foremost, the public
finance situation in the major European economies – and the burden it placed on
the financial sector – produced a negative impact over the course of the year.
 Highly-volatile financial markets
The downgraded credit rating of leading economies, such as the U.S. and Italy,
led to increasing insecurity on the financial markets and extremely high
volatility.
 Strong exchange rate fluctuations
Although the national debt crisis considerably weakened the value of the euro,
the Czech koruna depreciated by 2.9% against the euro over the course of the
year: After starting 2011 at an exchange rate of 25.06 CZK/EUR, the rate
reached between 24.00 and 24.50 CZK/EUR by the middle of the year, before
finishing at 25.80 CZK/EUR by the last trading day of the year.
Although the average exchange rate between the U.S. dollar and the euro
changed little, strong fluctuations were reported over the course of the year: The
U.S. dollar fell by approximately 13% in value against the euro in the first half
of the year(from 1.30to 1.47USD/EUR), but finished the second half year at a
rate of 1.29 USD/EUR.

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 High raw material prices
Strong price fluctuations were also seen on the raw material markets. Although
prices for most industrial raw materials fell towards the end of 2011, price
levels were still relatively high after the strong increase the previous year.
Oil prices rose steeply in the first quarter from approx.USD92 per barrel to a
high for the year of around USD 128 per barrel in May 2011. The average price
per barrel for the year of USD 110 was therefore 37% higher than the previous
year.
The price of copper hovered between USD 9,000 and USD 10,000 per ton up
until September, before falling to USD 7,500 at the end of the year. Aluminum
prices rose to almost USD 2,800 per ton until the middle of the year, but prices
also dropped sharply late in the year. At the end of December aluminum cost
USD 2,000 per ton.
 Asia – China and India remain strong
In China, the growth curve flattened somewhat from the previous year, but still
showed a definite upward trend. Overall, the Chinese economy grew by 9.2% in
2011. Political measures and higher wages ensured the positive development of
the domestic market.
India’s strong rate of economic growth remained relatively strong. GDP grew
by 7.0% in 2011. The overall situation was characterized by dynamic growth in
domestic demand. Besides private spending, Indian industry’s willingness to
invest also powered general economic developments.

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KEY STEP TOWARDS STRATEGIC PLANNING
Vision: Skoda Auto is a brand known for its lifestyle value, offering reliability
and European build quality with a constant Endeavour to introduce modern
technologies. The vision of the company is slated by the slogan below: -
Man needs an automobile as well as the nature
Technology focused on safety and environment
Modern engineering
Mission: to develop a brand name and brand following, to set up standards in
production and to be an example of automobile manufacturing in India.
Objectives: the company’s objective is to make India their global production
factory from where they can export their products to the world. Within the
country they want to be the leading premium automobile manufacturer in India.
Value: Skoda Auto philosophy of employing the latest technology to ensure
that our cars are built to the highest standard and are available at attractive
prices has a long tradition.
Goals: Skoda vision is to be the leading premium automobile MFG in India,
customer satisfaction, VFM products.

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Customers have responded to their products in the following way
 1st in Sales satisfaction index 2007
 'Most Technologically Advanced Car'
 'Executive Car of the Year'
 'NFO Voice of customer'
 'Best entry luxury car'
Strategy: The current strategies implemented are
 Create new market for small cars
 Market penetration with dropping prices
 To increase Local production percentage of components from 50% to
75%

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CONCLUSION
Following is the conclusion about Skoda India:-
 They make rock solid cars and fuel efficient cars which the customer
desire for and for this the sales speak for them selves
 In 2006 and 2007, Skoda India has received a spate of awards which has
been remarkable in terms of achievements like J D POWER ASIA
PACIFIC AWARDS FOR 2007 for being ranked 1st in Sales
satisfaction index 2007
 Skoda India also achieved the 'TCS award' in mid size premium
segment against Honda Civic in 2006 along with 'Most Technologically
Advanced Car' for Skoda Laura; 'Best Variant' for Skoda Superb
Turbo Diesel from CNBC-TV18 AUTOCAR AUTO AWARDS 2006
 'Executive Car of the Year' from NDTV PROFIT CAR INDIA
AWARDS 2006, and 'Auto tech of the Year' from OVERDRIVE 2006,
both awards for Skoda Laura

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RECOMMENDATION
 Their current strategies in Place takes care of most of the
recommendation I had in mind but few which haven’t been addressed are
 High labor cost during A.S.S is heavy on customers’ needs to be brought
down
 Reliability problem of Skoda Superb as the advanced engine cannot deal
with our fuel quality
 Unethical activities going with dealer and Service centre’s like changing
original parts with duplicate once, hence dealers and service centre have
to be inspected by the company
 High price on spare parts need to be brought down
 These are a few recommendations given by me, these are the few
problems I feel needs to be addressed by the company for better customer
service.

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BIBLIOGRAPHY
 Skoda Auto Annual Report
 Wikipedia
 Guidance By Faculty
 Www.Skoda-Auto.Co.In/
 Information Collected By Visiting SHARAYU MOTOR , Navi
Mumbai