How the VW board is depressing the mood of Skoda employees

Volkswagen subsidiary Skoda earns a lot - and should still save money as of October 30, 2026 • 2:51 p.m

While the parent company Volkswagen has many problems, the Czech subsidiary Skoda is making reasonable profits. But this is not automatically an advantage for the manufacturer.

Shift change at the Skoda headquarters in Mladá Boleslav, Czech Republic, northeast of Prague. More than 20,000 people work here. The mood is tense, even though the car manufacturer Skoda presented excellent quarterly figures today.

Skoda is on a growth path in all markets important to the brand: whether Germany, India or Western Europe - more Skodas were sold everywhere than in the previous year. In Germany, the increase in the first nine months was 15.9 percent compared to the previous year.

VW plans wage freezes for profitable subsidiary Skoda in the Czech Republic André Berthold, ARD Prague, Mittagsmagazin, Das Erste, October 30, 2026 • 1:00 p.m. Savings program despite good figures The Skoda party mood is now depressed by the VW board. He would like to implement a savings program for the entire group that would freeze salaries across the entire group until 2030. This is what it should say in the internal “Group Target Picture”, and this is also what the IG Metall union reports. There could also be cuts in special payments such as holiday and Christmas bonuses. And all of this also applies to the successful subsidiary Skoda.

This doesn't go down well at the factory gate in Mladá Boleslav. "It seems pretty drastic to me," says painter Matěj Kostlán, and his colleague Vladimír Procházka adds: "We see this as a big problem. Each of us has a loan and high costs."

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Skoda is the shining subsidiary in the crisis-ridden Volkswagen Group. Real money is made here. For every 100 euros in sales, Skoda generates a profit of 8.30 euros. For comparison: The core brand VW makes a profit of 1.30 euros for every 100 euros in sales. In other words: Skoda earns significantly more with every car.

Skoda also benefits from the technology in the VW Group. This means that once car platforms have been developed, they are used by both VW and Skoda. There are also lower labor costs. But Skoda has also made production more effective. At the main plant in Mladá Boleslav, combustion engines and electric vehicles are produced on the same production line.

“This has great advantages because you can also map demand fluctuations in production very flexibly,” says Stefan Bratzel, director of the Center of Automotive Management (CAR) in Bergisch Gladbach. “This reduces costs overall and increases utilization.”

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According to its own information, Skoda is enjoying the sales growth with a new and broader model range - and with the fact that electric vehicles and their comparable combustion models are offered at the same price. This means that demand has increased significantly. The all-electric “Elroq” increased sales by more than 50 percent.

But Skoda's success could also become Skoda's profit trap. At least Skoda interim boss Holger Peters warns against this. Skoda faces tough competition in the electrical business next year. In short: the more electric cars Skoda sells, the more pressure it puts on profit margins. The production costs for electric cars are still higher than those for gasoline or diesel vehicles.

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In order to change this in the long term, central value creation levers would have to be integrated into the group, explains Bratzel. When it comes to the production of electric cars, this is battery production. Skoda has already reacted here too. At the beginning of the year, battery production was inaugurated at the main plant.

If production costs can be minimized here too, then - the employees at the factory gate agree - they will also have earned bonus payments in the coming years.

This topic in the program: The First | ARD lunchtime magazine | Oct 30, 2026 | 12:00 p.m