I’ve just tried to argue once again why launching Skoda in the US would be a smart move, but I’m sure at least one of our esteemed readers will raise the following counterarguments and I’d have to fully agree with him/her, so here’s why I think why VW shouldn’t bring Skoda to North America: the market is already saturated and the upcoming changes that will affect the automotive industry will give Volkswagen an opportunity to redeem itself. None of these points were stipulated by the unnamed VW board member who was quoted to say it wouldn’t be a good idea to bring Skoda to the US anyway.
Firstly, at close to 17,5 million sales in 2015, the US market reached a new sales record last year but the growth rate of recent years has significantly slowed in 2016 and sales are projected to remain stable this year and the next few years before slowly declining again, as the market has reached its saturation point. This means that in order to gain volume and market share, some brands will start to offer discounts and incentives, perhaps stimulating others to follow in order to protect their share. This will erode profits for everyone, making it a very challenging environment to launch an all-new brand. Even if the manufacturers can hold the line on incentives, as they’ve promised they would, Skoda would have to steal sales from established brands with generations of faithful customers and boatloads of brand equity, which won’t be an easy task, especially if it offers everything they already offer, but in a different package. The only way to successfully enter such a difficult market environment would be to offer something completely extraordinary, to which the existing players don’t have an answer yet, in the way Tesla has done with its luxury EVs. This also brings me to my second point:
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