Skoda’s new factory in eastern Europe will have an annual production capacity of 350,000 units, which could double if there is enough demand, the automaker’s CEO Bernhard Maier said.
Skoda is taking the lead on the plant, which will build models for the Czech automaker and other brands in the Volkswagen Group.
The factory is planned to open toward the end of 2022 or beginning of 2023.
Maier said the search for a location has been narrowed to two potential sites from four. He did not name the sites.
Serbia and Turkey have been named as possible sites in media reports.
Maier said the factory will have an annual capacity of up to 350,000 units, the same size as the automaker’s plant in Kvasiny in the Czech Republic.
But the site will be developed to add extra capacity by building a second plant alongside the first, Maier said on the sidelines of Skoda’s annual results conference on March 20.
The plant is expected to make the Skoda Karoq and Seat Ateca compact SUVs.
Karoq and Ateca production “is the most likely scenario but it’s not finally decided,” Maier said.
The two SUVs are currently built in Kvasiny but the factory will need to free capacity for new models.
VW Group is transferring production of the VW Passat midsize car to Kvasiny from Emden, Germany, to create capacity to build EVs at Emden.
A small full-electric car that will be part of VW Group’s "MEB entry family" will also be added at Kvasiny plant.
Skoda is likely to lose sales this year because its Czech plants of Mlada Boleslav and Kvasiny are running at full capacity, Maier said.
The automaker could have sold 100,000 more cars last year if the capacity to build them had been available, he said.
Skoda built 886,100 vehicles in 2018 at Mlada Boleslav and Kvasiny.
A new paint shop has opened at Mlada Boleslav to eradicate a production bottleneck.
Skoda currently sends 60,000 units of its Fabia small car annually to be painted at VW’s Osnabruck plant in northern Germany, before they are returned for assembly at Mlada Boleslav. That will stop by the end of this year when the paint shop is fully operational, Maier said. Osnabruck also builds some Skoda Karoqs.
Skoda is about to start sales of its new Scala compact car that replaces the Rapid and will begin sales of the Kamiq small SUV in the autumn. Later this year it will unveil the replacement for its Octavia compact, its best-selling car.