Skoda is the key to Volkswagen group's growth strategy in central Europe and other developing markets. VW bought a stake in the Czech marque nine years ago but only completed its acquisition this year, buying the remaining 30 percent from the Czech government.
But VW has also expressed its intention to offer a $6,000 entry-level car for emerging markets. At last September's Frankfurt auto show, VW boss Ferdinand Pi'ch suggested this car would have its own platform, and would fit below the Lupo in VW's lineup. But at last month's Automotive News Europe Congress, VW South America President Herbert Demel said the Gol - built in Brazil and Argentina - could also become VW's low-cost car.
Demel suggested that the Gol could be used in addition to Skoda in emerging territories.
'The Gol is one of the simplest, best-value models within the VW group,' he said. 'It has 25 percent of the Brazilian market. It has been redeveloped to comply fully with environmental regulations and now meets the quality of most modern models.
'There's no reason why a car called the Gol should not have appeal in other up-and-coming countries.'
But Skoda remains at the forefront of VW's central and eastern European plans. Skoda's Czech plants in Mlada Boleslav and Kvasiny have been expanded, and VW has included the Skoda brand in its group-wide platform strategy.
Skoda produces three models, the Octavia, Fabia and Felicia. The Felicia, the only model that doesn't use a VW platform, will be replaced within two years by a new small family car.
Skoda employs 21,000 and expects to sell 440,000 passenger cars in 2000. Skoda executives expect production to grow to 1 million units within two years if a new push into Asia is successful.
Volkswagen also produces cars in Poland, Slovakia and Slovenia.
At VW's plant in Bratislava, Slovakia, capacity is scheduled to be increased to 300,000 units within two years when production of the VW Polo is moved from Wolfsburg and production of the new Colorado luxury sport-utility begins.
This spring, Volkswagen's plant in Poznan, Poland, began producing the Skoda Fabia. Poznan, which also makes the VW Transporter, plans to increase capacity to 80,000 vehicles in the next three years.
In Hungary, Audi built 52,579 TT sports cars at its plant in Gyor in 1999. Audi also built 1 million engines in Gyor last year.