Å kodaAuto ANNUAL REPORT 2003 - Skoda Auto

Letter from the ChairmanLadies and Gentlemen,The past year was a difficult year forthe entire automotive industry. Theturning point is getting closer; thequestion is when it will arrive. Thereports coming out of the world’sstrongest economies are not veryoptimistic, and so we can only statethat the economic recovery has beenpostponed again. The slow economicgrowth was due in particular toa cooling-off of demand in EUcountries and public finance reformsimplemented in many countries.Despite the unfavourable situationin demand for passenger cars, ŠkodaAuto managed to grow unit sales by1% (4,233 vehicles) compared to theprevious year, delivering 449,758vehicles to customers all over theworld. For Škoda Auto, the past yearwas significant thanks to a number ofexceptional events. We producedour four-millionth car since joiningthe Volkswagen Group in 1991. The500,000th MQ200 gearboxmanufactured in the engine plantconfirms that this investment– the biggest the Company has madein recent years – was justified.Total revenues reached CZK145.2 billion. Profit before taxationtotalled CZK 2.5 billion. Škoda Autoreacted to the continuing flateconomic environment and thecomplicated market situation byexpanding its product offerings andimplementing special sales initiatives.The ongoing programmes to reduceoverheads and raw materials costs,which were successfully realised inco-operation with suppliers, togetherwith optimisations in the area ofproduction and logistics, allcontributed to the Company’sincreased competitiveness.One of the key factors in ensuring weremain competitive is our flexibleapproach to market demands.In the area of services, the pastyear saw roll-outs of very attractiveprogrammes to allow customers tofinance the purchase of a new car.An expansion of the Škoda AutoParts Center further improved oureffectiveness in the area of providingoriginal spare parts and accessories.Maximum customer satisfactionremains the number-one objectiveof Škoda Auto.Škoda Auto’s new products addressthe changing lifestyles of the 21stcentury. We were very pleased bythe positive response given to ournewest design study, the ŠkodaRoomster, which is a hint at what canbe expected from the Škoda brand inthe future.Because no major recovery in carmarkets can be expected in the shortterm, Škoda Auto’s goal for 2004remains to match the previousyear’s earnings. Next year, theautomotive industry will beconfronted by a number ofunpredictable factors – such as priceharmonisation, removal of the blockexemption, the Czech Republic joiningthe EU, and others. I am confident thatwe will be able to leverage these newconditions and challenges andtranslate them into further successfuldevelopment of our Company.On behalf of the Board of Directorsof ŠKODA AUTO a.s., I would like tothank all our customers for their trustand loyalty to our products andservices. I would also like to thankall our partners and employees whoplayed an outstanding role in theperformance achieved by theCompany in 2003.Ing. Vratislav KulhánekChairman of the Board of Directors12