MLADA BOLESLAV, Czech Republic (Bloomberg) -- Skoda is confident that deliveries this year will rise as the introduction of new or updated models, including a new large SUV, the Octavia compact and the Rapid Spaceback compact hatchback, offsets a drop in European demand.
The first quarter and probably the first half will be weaker than a year earlier because of the contraction in Skoda's main European markets and the transition to the new Octavia, CEO Winfried Vahland said.
The next quarter looks better than the current one and growth should continue to enable full production capacity, Vahland told reporters on Wednesday. "As soon as the full volumes of the Octavia and the Spaceback will be available, the tide should continue to turn," he said.
The Octavia notchback entered showrooms in November and a wagon version launches in May. The Rapid Spaceback is scheduled to go on sale by the fourth quarter after its debut at the Frankfurt auto show in September. A sedan version of the Rapid is already on sale.
New large SUV
Eight new or refurbished models will come out this year and Skoda will completely revamp its line-up by 2015, Vahland said. The division also plans to add an SUV in coming years that's bigger than its current Yeti compact SUV, he said. The roll-outs are the "right recipe" against shrinking European demand, the CEO said.
Russia, China and western Europe should be the biggest markets for the new SUV, Vahland said. Skoda hasn't decided yet on a production site for the model, he added. In addition to the brand's plants in the Czech Republic, Skoda also produces cars in Russia, India and China, including at factories in partnership with parent Volkswagen.
Vahland told Germany's Automobil Produktion magazine that the brand sees annual global volumes of between 150,000 and 200,000 for the SUV, which could launch in 2016 and be offered as a seven-seater as well as a five seater. The Yeti is the brand's fastest-growing model with sales up 24 percent last year to 87,400 units helped by strong demand in Russia, Vahland said.
Skoda's operating profit fell 4.2 percent to 712 million euros ($916 million) last year. Revenue rose 1.7 percent to 10.4 billion euros.
The brand's global sales in February declined 6.9 percent to 67,100 vehicles, the company said. Sales in the EU and EFTA markets fell 12.3 percent last month to 33,307, according to industry association ACEA.
Skoda is "on course" to fulfill its 2018 growth target of at least 1.5 million annual deliveries, Vahland said. That compares with 939,200 vehicles sold in 2012, a gain of 6.8 percent.
Growth at Skoda is a key part of VW Group's plan to overtake Toyota Motor Corp. and General Motors Co. as the world's biggest carmaker by 2018.