A ?kodA year in review - Skoda Auto

2012A škoda year in review

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Contents2012 – A Škoda year in reviewForeword by the Chairman of the Board of Management Prof. Dr. h.c. Winfried Vahland4Board of Management6A class of its own – the third generation of the all-new ŠKODA Octavia makes its debut8“The new ŠKODA Octavia – a car with style” – an interview with head designer Jozef Kabaň14Shaping the Company’s future – the ŠKODA global growth strategy impacts many different areas. Investments intoadditional production and storage capacity, IT, logistics networks and staff training pave the way to the next level 16Small car, big impact – the ŠKODA Citigo was designed to appeal to new target groups and customers worldwide21For a greener future – sustainable development is important for ŠKODA AUTO. With the GreenFuture project theCompany has entrenched sustainability even more firmly within the Company 22The new class of ŠKODA – with the ŠKODA Rapid, ŠKODA introduces the youngest model series into its portfolio26Breaking down borders – with its ambitious model offensive and international growth strategy ŠKODA sets the coursefor a continued successful global development 30“Employees are ambassadors of our brand abroad” – an interview with ŠKODA Board of Management memberfor Human Resources, Bohdan Wojnar 34Highlights of the year – 2012 has been an extremely busy but also very successful year for ŠKODA with the launchof new models, new sales records and many other remarkable events 35‘Simply Clever’ is a reality throughout the Company – an interview with ŠKODA Board of Management member forTechnical Development, Dr. Frank Welsch 40The fascination of tradition – at the redesigned ŠKODA Muzeum in Mladá Boleslav visitors can embark on an inspiringjourney through 117 years of the ŠKODA brand’s history 42A truly historic performance – ŠKODA goes on to win the most important international rally championships as well assix national rally competitions in 2012 49“Tradition-minded, team-spirited and hungry for success” –an interview with the Head of ŠKODA Motorsport, Michal Hrabánek 53Product portfolio – with the launch of the ŠKODA Rapid, the brand’s model range now encompasses seven modelseries for virtually all market segments 542012 – A Škoda year in review3

ForewordWe have had another extremely successful year – our eighth consecutiverecord year; a year in which ŠKODA AUTO set the right coursefor the future; a year in which we continued to forge ahead with ourgrowth strategy in all areas. In 2012, we sold a total of more than939,200 vehicles and therefore exceeded the previous year’s recorddeliveries. We are also well on our way to reaching our strategic salestarget of at least 1.5 million ŠKODA automobiles per year by 2018.We were able to strengthen our position in key markets in 2012,despite the difficult situation in a number of European markets.Never theless, the outlook remains positive: The global automobilemarkets will continue to grow and our model offensive will providethe necess ary momentum. In 2013 alone, we will be introducingeight new ŠKODA models, beginning with the new ŠKODA Octavia,the heart of our brand, which we recently presented at the GenevaMotor Show as Sedan, Combi estate car and 4x4 Combi estateversions. With record investment at our sites, we also created theneces sary conditions for the continued growth of our Company.Positive sales development and successful measures to boost efficiencyensured that our financial performance remained largely stabledespite difficult conditions worldwide. Sales revenue increasedby 4.0% year-on-year to reach CZK 262.6 billion and operating profitreached CZK 17.9 billion. This gives us the strength to keep ŠKODAAUTO on a steady growth course.Prof. Dr. h.c. Winfried VahlandChairman of the Board of ManagementThe most important pillar of our continued growth is our model offensive:Over the next few years, we will be introducing a new or substantially-revisedŠKODA vehicle onto the market every six monthson average. We started out with the ŠKODA Citigo – our Company’sfirst venture into the fast-growing small car segment. This wasfollowed by the ŠKODA Rapid, which combines the finest qualitiesŠKODA has to offer – space, functionality and value for money. It is alsothe first car with our new ŠKODA design. The new ŠKODA Rapid ispositioned within the ŠKODA model range between the ŠKODA Fabiaand ŠKODA Octavia: It is a new class of ŠKODA. The final world premiereof the year was the new ŠKODA Octavia in December 2012: Thethird generation of our bestseller was welcomed with enthusiasm bypublic and experts alike. It is set to continue the model’s on-goingsuccess story, which began in 1996.We will use the strength of our brand to convince people of our valuesin impressive new models. ŠKODA automobiles are a reliable andpractical aspect of our customers’ life, with lots of smart and useful‘Simply Clever’ details.4 2012 – A Škoda year in review

‘Simply Clever’ also applies to our vehicles themselves, and definesour thoughts and actions throughout the entire company.We achieved important milestones in 2012, strengthening our marketposition, especially in growth markets. In December, we launchedproduction of the ŠKODA Yeti at the Nizhny Novgorod plant, in cooperationwith Volkswagen and the Russian manufacturer GAZ Group,to meet the steadily growing demand for this specific model in theRussian market.To secure our future growth, we made substantial investments inmany areas: The ŠKODA Octavia and Rapid production line at ourMladá Boleslav headquarters was expanded from 800 to 1,200 unitsper day. Local production lines for axles were also modernised andproduction retooled for state-of-the-art TSI petrol engines. Our partscentre was expanded to meet constantly growing demands, and anew, high-performance energy-efficient IT centre was also put intooperation. After extensive remodelling, modernisation and expansion,the Vrchlabí plant began production of the advanced DQ200seven-speed dual clutch transmission, while in Česana, constructionof a new engine testing centre got underway. At our new ‘Lean Centre’,we are already training employees from all divisions in importantsubjects, such as ‘lean’ production methods, efficiency and optimisedprocess control.Regular employee training is vital to our global presence. ŠKODAemployees abroad must not only possess the necessary professionalskills, but also the will and capability to adapt to new and oftenunexpected challenges. For this reason, we launched a number ofdifferent programmes in 2012 to prepare our employees for workingabroad and to support them while they are away and when theyreturn. These initiatives enable our employees to serve as capableambassadors of our brand abroad.Although ŠKODA AUTO has its eyes firmly fixed on the future, theCompany is understandably proud of its over 117-year history. In recognitionof this, and to provide a fitting setting in which to tell thefascinating story of our Company, we have completely redesignedand remodelled the ŠKODA Muzeum in Mladá Boleslav. Visitors to thenew museum not only have the opportunity to admire magnificentŠKODA cars from the past, but also to appreciate the power of theŠKODA brand.The strength that comes from being part of a long tradition is notonly evident at the new ŠKODA Muzeum. The successful track recordof our motorsports team is also rooted in our Company’s more than111-year motorsports tradition and its wealth of experience.2012 was the most successful year to date in our motorsports history:The team continued its winning streak with victories in the EuropeanRally Championship and the Asia Pacific Rally Championship aswell as six national rally competitions. ŠKODA Motorsport’ exceptionalachievements were exemplified by its hat-trick in the prestigiousIntercontinental Rally Challenge: In 2012, ŠKODA Motorsport broughthome both the driver and manufacturer championships for the thirdyear in a row.In the crucial area of sustainability, we are open to new ideas – settingambitious goals and finding new ways to reach them. Responsibilitytowards people and the environment defines the actions ofŠKODA AUTO, from vehicle development through production to recycling.We have therefore established the ambitious ‘GreenFuture’environmental project to entrench sustainability even more firmlythroughout the Company.We aim to make individual mobility as sustainable as possible. We alreadyhave more than 50 models in our line-up with emissions of lessthan 120g CO 2/km – including almost a dozen with less than 100gCO 2/km. We are currently testing a fleet of electric cars in everydaydriving conditions, which will provide us with important insights forelectric driving.One thing is clear: 2012 would never have been such a successfulyear without a team that is prepared to do everything in its power tosupport the goals of our Company. The sales records, the strength ofour brand, the exceptional quality of our vehicles, our strong reputationat home and abroad: All of these achievements are thanks to thehard work and dedication of our colleagues – and we are extremelygrateful to all of them.We have ambitious plans for 2013. We will do everything to ensurethat the ŠKODA AUTO success story continues! This fascinating companywith its fine history is worth every effort.YoursProf. Dr. h.c. Winfried VahlandChairman of the Board of Management2012 – A Škoda year in review5

Board of ManagementTaking it to the next level:Successful implementation of theŠKODA growth strategy demandstop performance from all divisions.ŠKODA will increase its worldwide annualsales to at least 1.5 million units by 2018.Besides Europe, the strongest growth is likelyto come from the emerging markets.Prof. Dr. h.c. Winfried Vahland, Chairman of the Board of ManagementWe increased our deliveries even thoughmarkets were difficult. The situation in the marketscontinues to be demanding. However, ŠKODA remainson the offensive with new models.Werner Eichhorn, Board Member for Sales and MarketingThe successful implementation of the ŠKODA growthstrategy creates many opportunities for purchasing –in the procurement of purchased parts and services, aswell as in planning and monitoring. We are deter -mined to use these opportunities to our advantage.Dipl.-Ing. Karlheinz Hell, Board Member for Purchasing6 2012 – A Škoda year in review

We continue to invest in new products.Our expenditures clearly show that we areconsistently pursuing our goals and implementthem with concrete measures. We haveset the right course and will continue to do so.Dipl. Kfm. Winfried Krause, Board Member for Commercial AffairsŠKODA is preparing its locations for growthin the years to come. The production is aimedat creating the necessary conditions forthis. We are pursuing our plans consistently.Dipl.-Ing. Michael Oeljeklaus, Board Member for Production and LogisticsThe new ŠKODA Octavia shows howŠKODA is consistently following its own path.It boasts the qualities of a mid-sized carat a compact car price. It is the ideal car fordemanding, self-assured customers.Dr. Ing. Frank Welsch, Board Member for Technical DevelopmentŠKODA advanced in all relevantfields. We need a top teamfor our growth plans. We arecontinually improving our staff’sskills level as well as hiringexternal talents.Ing. Bohdan Wojnar,ŠKODA Board Member for Human Resources2012 – A Škoda year in review7

ŠKODA OctaviaA class of its own –the newŠKODA Octavia8 2012 – A Škoda year in review

For ŠKODA, the third generation of the ŠKODA Octavia is more than just anothernew car. The rise of ŠKODA since the Nineties is closely tied to thesustained popularity of the ŠKODA Octavia – the car that is the ‘heart of the brand’.Customer expectations for the new model are correspondingly high.It was one of those moments when everything comes together– in this case, decades of experience and the latest insights, knowledgeand intuition, engineering expertise and a passion for cars: On11 December 2012, the third generation of the ŠKODA Octavia is aboutto make its world debut at the redesigned ŠKODA Muzeum in MladáBoleslav. It is shortly before two o’clock. This is no ordinary event.Today will have far-reaching consequences and set the course wellinto the future –what is being presented here, after all, is a successorto the most successful ŠKODA model ever. Success is an obligation.The first journalists and camera teams begin to arrive more thantwo hours before the official start of the event. They come fromthe Czech Republic, of course, as well as Germany, Switzerland andAustria, but also from farther afield – Ireland, the UK and even India.Many of them have made a long and difficult trip to be here. Nobody2012 – A Škoda year in review9

ŠKODA OctaviaGreeted by thundering drums and welcomed by theŠKODA Board of Directors, leading ŠKODA representativesand the international press: The new ŠKODA Octavia madea lasting impression at its festive premiere in theŠKODA Muzeum in December 2012.wants to miss the ŠKODA presentation of the latest version ofits most important model and top-seller.For now, the new ŠKODA Octavia is still under wraps, concealedunder a light-green sheet in the lobby of the ŠKODA Muzeum.Some of the more inquisitive guests tentatively run their handsover the material: along the door handles and bonnet, eager tolearn more. But it is not time yet. The suspense is rising. Everyonemakes their way into the Museum’s huge new assemblyhall. An enormous stage with turntable and 270-degree projectionscreens awaits journalists from around the world.Drums roll, and a burst of loud music announces that the timehas come – the countdown begins. ŠKODA Chairman of theBoard of Management Prof. Dr. h.c. Winfried Vahland drives ontothe stage in a bright red latest-generation ŠKODA Octavia.All cameras are trained on him and the car. Amid a flurry of cameraflashes, Vahland addresses the audience, but perhaps also– just a little – the car that stands behind him on the turntable,shiny and new: He tells the press, the ŠKODA Octavia is “a milestonefor the Company”, “the heart of the brand”. The new modelis “a good car made even better”. The ŠKODA CEO assuresthe audience that new cars are “the best concept against weakmarkets in Europe”. The more than 3.75 million ŠKODA Octaviacars sold since the first generation was launched in 1996 certainlytell a convincing story. The ŠKODA Octavia has made theŠKODA brand what it is today: a successful international playerthat sells cars in more than 100 countries worldwide.Winfried Vahland names the strengths of the new ŠKODAOctavia: It is roomy, practical, safe, timelessly elegant, technicallyadvanced, reliable and affordable – and, naturally, ‘SimplyClever’ with many practical details. The ŠKODA Octavia has allthe right ŠKODA genes and delivers exactly what customersneed. The ŠKODA Octavia is, and always has been, a very specialcar that boasts the qualities of a mid-range vehicle at a compact-carprice. The total package of generous space, timelessdesign, high functionality, sophisticated technology and10 2012 – A Škoda year in review

Reinterpretation of a modern classic: The thirdgeneration of the ŠKODA bestseller is more impressivethan ever with striking looks, strong inner valuesand the same exceptional price/performance ratio –proving that good things don’t have to be expensive.affordable price make the ŠKODA Octavia unique in itsclass. Since 1996, the ŠKODA Octavia has always offereda bit ‘more’ car. That is its formula for success. WinfriedVahland concludes: “The new Octavia is our best. It is aclass of its own.”The scene changes: The new Board Member for TechnicalDevelopment Frank Welsch drives onto the stage in asilver-coloured ŠKODA Octavia and pays tribute to theengineers, whose expertise and hard work went into thenew ŠKODA Octavia, setting new standards for aerodynamics,exhaust emissions and fuel economy. And whoalso succeeded in making the new generation up to 102kilos lighter – despite its larger interior, improved safetyequipment and extensive comfort features.With fuel consumption of only 3.3 l/100 km and emissionsof 87 g CO 2/km, the GreenLine variant of the new ŠKODAOctavia is especially fuel-efficient. Frank Welsch pointsout that with the sales targeted for this major high-volumemodel, the new ŠKODA Octavia will help fulfil theCompany’s responsi bility for the environment, resourcesand people. At the same time, it also features the latestdriver assistance systems for convenience and safety,which were previously found only in luxury and high-endmodels and are now available for the first time in a ŠKODAcompact car.ŠKODA Octavia customers have always appreciated thecar’s generous space. But the new generation goes evenfurther and offers substantially more room than its already2012 – A Škoda year in review11

ŠKODA OctaviaMore and less: longer and wider, with more luggage space,more legroom, more headroom, more safety and more assistancesystems. But also: less weight, lower fuel consumption andlower CO 2emissions – the ŠKODA Octavia is in a class of its own.spacious predecessor, according to Frank Welsch, and sets a newbenchmark in its segment: No other compact car has a longer passengercompartment, greater legroom or more headroom in the back.There is also added headroom for front-seat passengers, and moreelbowroom in the front and back.The ŠKODA Octavia’s biggest asset has always been its luggagecompartment, and that applies more than ever to the new model,which now boasts a capacity of 590 litres – a new best-in-class. Luggagefor five people or a whole week’s worth of shopping present noproblem at all. With the backseat down, the volume expands to 1,580litres to allow a surfboard or even a wardrobe to fit inside.The new ŠKODA Octavia also features lots of typically-ŠKODA ‘SimplyClever’ ideas – things that make life easier for ŠKODA Octavia drivers.Frank Welsch mentions the reversible floor covering for the luggagecompartment: one side with ‘elegant’ carpeting; the other witha washable rubber coating – ideal for wet ski-boots or even transportingsacks of potatoes. Flexible cargo elements to prevent itemsfrom sliding around in the luggage compartment can easily be foldedaway. Frank Welsch also points out the safety vest stowed under thefront seat, the ice scraper built into the fuel filler cap and the smartphoneholder integrated into the cup-holder.Jozef Kabaň is the last to address the media. The head designerof ŠKODA is responsible for the striking looks of the new ŠKODAOctavia. Born in Slovakia, with a strong international reputation,Kabaň speaks in German with feeling and enthusiasm: Commonsense and passion must come together in a car. Or, in his own words:Despite all the “features for the head, the heart must not stay unmoved”.People seem to understand exactly what he means. Theaudience feels his enthusiasm as he runs his hands along the bodyof the car. Clear, precise, timeless design was the requirement forthe ŠKODA Octavia. The third generation must project value and selfassuranceand be able to maintain its appeal over the years.Kabaň’s final words sound like a heartfelt ‘farewell’ to a good friendwho must now make his way on his own: “May your story be a successfulone”, he says as he steps back with a last critical glance overthe new car. In one of the many interviews Kabaň gives after theworld premiere of the ŠKODA Octavia at the ŠKODA Muzeum, he talksof his pride in continuing the ŠKODA Octavia’s long tradition with thisnew model. Of course, he hopes that the success of this model willearn the ŠKODA Octavia a place in the brand museum sometime inthe future. Expertise and passion – for ŠKODA, two concepts that areinextricably linked. Key production areas atthe main plant in MladáBoleslav were modernisedand expanded for productionof the new ŠKODAOctavia. The new modelcarries the high expectationsof the entire workforce.The ŠKODA Octaviais closely tied to the riseof the ŠKODA brand, and,for that reason, is consideredthe ‘heart of theŠKODA brand’.12 2012 – A Škoda year in review

14 2012 – A Škoda year in review

InterviewClear lines, clean surfaces, attentionto detail – Jozef Kabaň and his team aimedexplicitly for a ‘car with style’.Interview with head designer Jozef Kabaň“The new ŠKODA Octavia– a car with style”When Jozef Kabaň talks about cars, it sounds like a declaration of love.His words are full of passion.“I can’t help it,” he says, by way of explanation, “I just love cars.”The modest and reservedhead designer of ŠKODA hasworked for Volkswagen, Audiand Bugatti and, over the courseof his career, made himself aname as one of the most creativeautomobile designersaround. For ŠKODA, Kabaň developeda new design languagethat will define all future models.The ŠKODA Octavia is particularlyclose to his heart: He understandshow crucial this model, inparticular, is to the brand andthe Czech people, who have regardedthe ŠKODA Octavia asthe pinnacle of Czech engineeringexpertise for many years.Mr Kabaň, what´s so specialabout the design of the newŠKODA Octavia?Clear lines. clean surfaces, attentionto detail – a really attractivecar with style – thetrue ŠKODA Octavia.Doesn’t every designer say thatabout their latest masterpiece?Well, perhaps. But I believe wehave really managed to combinethe maximum with the minimum.What I mean is: maximumimpact with minimum visibledesign complexity. I love minimalism!Can you be more specific?See the dynamic effect of theupswept window line in the reardoors? We call this design detail‘the fin’. Or the rear of the car:clearly-defined, tidy, clean – forme, that is pure reduction to theessential.The front headlights also lookkind of playful …That’s right. Successful car designconnects on several levels,not just one. With the frontheadlights, we have extendedthe vertical lines of the front grilleinto the headlight itself as an illuminatedelement. The effect isnot unlike a woman’s eyelashes– beautiful and sensual – and alsopays tribute to the art of traditionalBohemian glass-working.But the overall impression of acar is actually about somethingcompletely different.How do you mean?Proportions. Proportions arewhat count. We’ve given thenew ŠKODA Octavia a longerwheelbase than its predecessor– which, with its shortenedfront overhang, makes the carlook more dynamic. At the sametime, there is a smooth and harmoniousflow to the side view.The new car looks wider – andit is. That gives it a very self-assuredstance. It looks good onthe road. That is what this is allabout: dynamism and repose,clarity and concision.If you compare the new ŠKODAOctavia with the previousmodel …… then I see that it has grownup in more than one way. Ourjob was to create a shape forthe most successful member ofthe ŠKODA model family, whichwould appeal to customersworldwide. The ŠKODA Octaviais the heart of our brand and akey model in our growth strategy.Its design must be distinctiveand appeal to many differenttarget groups. What an excitingtask! As I see it, our ŠKODA Octaviahas grown up.How do you balance the diversedesign expectations of a globalaudience with the personalitya car needs to succeed intoday’s marketplace?There’s only one answer to that:to create your own style insteadof following trends. It is importantto have a clear design languagethat will remain attractiveover time and also works on aninternational level. I strongly believethat we have achieved thisin an exemplary fashion with thenew ŠKODA Octavia.If we said design is important,but not everything, would youtend to agree?Absolutely. It’s about creating alogical and plausible emotionalconnection between a car’sphysical appearance and its innervalues. And that’s preciselywhat ŠKODA is all about: innervalues. It is our job as designersto make them visible.2012 – A Škoda year in review15

Expansion of production capacity at the Mladá Boleslav plantThe Mladá Boleslav plant has been set up for the start of production of the third generation of the successful ŠKODA Octaviamodel and the new compact sedan, the ŠKODA Rapid. The new class within the ŠKODA model range is positioned betweenthe existing ŠKODA Fabia model and the new ŠKODA Octavia, which are also built on site. Substantial expansion and comprehensivemodernisation is needed to allow up to 1,200 vehicles per day to be built on the Rapid and Octavia lines alone. Onceexpansion has been completed, a total capacity of up to 2,400 vehicles per day, which includes ŠKODA Fabia production at thesite, will be available at the main plant in Mladá Boleslav. The two new models, the ŠKODA Rapid and, naturally, the new ŠKODAOctavia, the brand’s top-selling model, will play a decisive role in successful implementation of the ŠKODA growth strategy,which calls for delivery of at least 1.5 million vehicles per year to customers by 2018, including many new buyers worldwide.InvestmentsShaping the Company’sfutureThe ŠKODA global growth strategy impacts many different areas.On its way to the next level, the Company is adding production and storage capacity,updating IT and logistics networks and training staff in the relevant fields.In summer 2012, during works holidaysat the main Mladá Boleslav plant, preparationsgot underway for the start of productionof the ŠKODA Rapid. Construction of anew engine testing centre was also scheduledto begin in nearby Česana in autumn. Atthe Vrchlabí plant, meanwhile, a state-ofthe-arttransmission production facility wascompleted in late 2012: At ŠKODA AUTO,clearly, all signs point to innovation andgrowth.Extraordinary goals require extraordinaryefforts: ŠKODA aims to increase globalsales to at least 1.5 million vehicles per yearby 2018 – a target that cannot be reachedwithout considerable effort. Investments inproduction, logistics, research and development,and employee training are all on theagenda.Current figures confirm the momentumbehind the growth of ŠKODA AUTO: In themore than 20 years since ŠKODA AUTO becamepart of the Volkswagen Group in 1991,a total of almost CZK 250 billion has been investedin the Czech company. In 2012 alone,the Company invested CZK 20.56 billion inproperty, plants and equipment, with focuson its European sites. ŠKODA AUTO was recentlynamed ‘Investor of the past two decades’by the Czech Ministry of Industry andTrade in partnership with the Czech InvestAgency and the Association for Foreign Investment.162012 – a Škoda year in review

Expansion of axle and engine production atMladá Boleslav plantŠKODA is also making broad investments in new manufacturing technologies andgradually increasing capacity at many plants and in many areas to meet the demandsof the ŠKODA model offensive. This especially applies to the main plant inMladá Boleslav, where production capacity for front and rear axles is being optimisedthrough expansion measures. The production line has been extended to atotal length of 60 metres, fully modernised and the level of automation increased,to boost capacity for rear axle production from 1,000 to 1,700 axles per day.As part of its investment programme in the Czech Republic, ŠKODA AUTO hasalso begun production of new petrol engines at the Mladá Boleslav plant at a rateof up to 2,200 units of 1.2 and 1.4 TSI engines per day. These engines are lighter,enabling lower fuel consumption and emissions.Start of ŠKODA Yeti production in RussiaOn 6 December 2012, ŠKODA launched production of the ŠKODA Yeti in collaboration with Volkswagen Russiaand the Russian automobile manufacturer, GAZ Group, at the Nizhny Novgorod plant. The timing could not havebeen better: Demand for the ŠKODA Yeti climbed by almost 111 per cent year-on-year in Russia in 2012. In preparationfor the start of production in Nizhny Novgorod, the ŠKODA Yeti had been produced here as an SKD modelsince late 2011. The new ŠKODA Octavia will also be built at the same facility from mid-2013 onwards.2012 – A Škoda year in review17

Opening of new ‘Lean Centre’ in Mladá BoleslavŠKODA AUTO also sent a clear signal with the opening of its new ‘Lean Centre’ in Mladá Boleslav. Withfour floors, more than 5,600 m 2 of space, the new ‘Lean Centre’ is the largest training centre of ŠKODAAUTO in the Czech Republic. The focus here is on employee training in the context of the Company’sglobal growth strategy. Employees need to learn how to make processes simpler, more efficient andmore environmentally-compatible. Theoretical and practical courses in assembly, body construction andprocess optimisation for production and administration are offered for suppliers as well as ŠKODA employees.According to Michael Oeljeklaus, Board of Management member for Production and Logistics,the new Lean Centre will help secure the long-term growth and competitiveness of the Company.Transmission manufacturein VrchlabíThe Vrchlabí plant, which formerlybuilt the ŠKODA Octaviaand, until the end of last year,the ŠKODA Roomster, will nowmanufacture the modern, highlyinnovativeDQ200 seven-speeddual clutch transmission. Thenew training centre for transmissionassembly, logistics and qualitylabs will help make Vrchlabíone of the most modern transmissionproduction facilities inthe entire Volkswagen Group.The plant was chosen to buildthe new transmission in 2011, andno fewer than 1,000 units per dayhave been produced here sinceSeptember 2012. Capacity is setto increase by 50 per cent frommid-2013. ŠKODA Roomster productionresumed at the Kvasinyplant in January 2013.18 2012 – A Škoda year in review

Construction of new engine testingcentre in ČesanaThe new engine testing centre in Česana will give additionalimpetus to the more-than-100-year tradition of ŠKODA enginedevelopment and production. “ŠKODA is establishingitself more than ever as an additional competence centre forengine development within the Group,” states Chairman ofthe Board of Management Prof. Dr. Winfried Vahland at theofficial foundation-laying ceremony on 25 September 2012.The initial construction phase, with 21 new engine and componenttesting bays at its core, is scheduled for completionby late 2013. With this project ŠKODA AUTO will create 40new jobs. It represents one of the largest development investmentprojects in the Czech Republic currently.Opening of the redesignedŠKODA MuzeumThere has also been substantial investment inthe ŠKODA brand: 26 November 2012 saw the officialopening of the redesigned ŠKODA Muzeumin Mladá Boleslav, where selected ŠKODA automobilesare presented in a 1,800 m 2 multimedialandscape, offering a totally new perspective onmore than 117 years of fascinating company history.The redesigned, remodelled museum will playa key role in future ŠKODA brand communications.2012 – A Škoda year in review19

Expansion and modernisation of parts centreThe parts centre in Mladá Boleslav is being expanded and completely modernised for futuretasks. The total area of 50,000 m 2 will be doubled to more than 100,000 m 2 . Once completed,the warehouse, with eleven aisles of fully-automated 40-metre-high storage bayswill be one of the tallest buildings in Mladá Boleslav. Around 500 employees will be able toprocess up to 24,000 orders a day from around the world. The current range of parts andaccessories will be increased by 50 per cent by 2018 to include 214,000 different parts.New IT centreAnother of the key investments of ŠKODA AUTO is the new IT centre in MladàBoles lav, with close to 200 computer racks and a total of almost 2,500 data storageand data processing servers. The new system provides seven ŠKODA AUTO andVolkswagen Group production locations, as well as 106 import companies worldwideand 330 ŠKODA dealers in the Czech Republic and Slovakia, with the necessaryIT support. This increased performance will boost energy efficiency by 30 percent compared with the old IT centre. Further expansion is possible at any time.20 2012 – A Škoda year in review

ŠKODA CitigoSmallest ŠKODA makes a big impactYoung singles, seniors and families lookingto buy a second or third car – these arethe target customers for the most compactmodel in the ŠKODA line-up, the ŠKODACitigo. The sixth model line of ŠKODA is builtto appeal to urban drivers who appreciate acompact, agile and safe car that makes thebest possible use of its space. After its debutin the Czech Republic as three-door versionin November 2011, the car was soon named‚Best City Car’ and ‚Internet Car of the Year’.The five-door model was officially presentedas a world premiere at the Geneva MotorShow in March 2012.The ŠKODA Citigo will play a key role in theŠKODA growth strategy, and was designedto appeal to new target groups and customersworldwide. Compliance with the latestsafety standards was also a high priority.The success of these efforts was confirmedby the car’s top five-star rating in the EuroNCAP crash test, which established theŠKODA Citigo as one of the safest vehicles inits class. Highly-efficient engines also makethe ŠKODA Citigo one of the most fuel-efficientoptions in the small car segment. Thisis particularly evident in the ultra-efficientGreen tec version of the ŠKODA Citigo, whichboasts an impressive fuel consumption ofonly 4.1 l/100 km and low emissions of 96 gCO 2/km.ŠKODA is also taking a new approach tocommunications with the ŠKODA Citigo – forexample partnering with well-known DJ andproducer Tiësto and launching a new mobile‘ŠKODA MEET’ app, targeted at youngpeople.The appeal of the new ŠKODA Citigo was affirmedby the success of two special editionson display at last year’s annual gathering ofcar buffs at Lake Wörthersee in Austria: Boththe ŠKODA Citigo Rally and the ŠKODA CitigoDJ Car on show there were a big hit with fans– and not just with tuning enthusiasts.The crowd hasfun with theRally versionof the SKODACitigo at the 2012Wörthersee carmeet. It becamea major attractionfor all car enthusiastsand tuningfans present.2012 – A Škoda year in review21

SustainabilityFor a greener futureSustainable development has long been both an aspiration and an obligation for ŠKODA AUTO.Now, the Company has launched the GreenFuture project to entrench sustainability even more firmly withinthe organisation. A steering committee, reporting directly to the Board of Management,manages all sustainability activities relating to products, production and processes. This puts ŠKODA AUTOin position to implement the Group Strategy aimed at making the Volkswagen Group the mostsustainable automotive company in the world by 2018.He has one of the most exciting jobsthere is at ŠKODA AUTO currently. As headof the newly-created GreenFuture project,Pavel Vacek is responsible for making sustainabilityeven more of a priority at ŠKODAAUTO. He looks forward to this challengingand complex task: “We have ambitious goalsat ŠKODA AUTO – for our model offensive,our growth targets, and also for our sustainabilitymanagement,” he explains.Vacek aims to bundle all of the Company’ssustainability activities together for maximumimpact. At the same time, new goalswill be defined and pursued: “Sustainability isa complex issue that concerns all divisions ofthe Company and all hierarchical levels.”He adds: “Our task covers not only a widerange of topics, but also a tremendousdepth. That is what makes it so fascinating.It also shows just how big a challenge weface with GreenFuture.”The major significance of sustainability forŠKODA AUTO – and therefore for the GreenFuture project – was underlined by Chairmanof the Board of Management Prof. Dr. h.c.Winfried Vahland in the foreword to the currentSustainability Report: “A healthy environment,good working and living conditionsand a stable economic framework are allessential to our success. Responsible conductis therefore fundamental to securingthe future of our Company.” The latest SustainabilityReport also charts new territoryfor ŠKODA AUTO: Although this is the thirdreport of its kind, it is the first to follow theinternationally recognised guidelines of theGlobal Reporting Initiative and therefore offerthe degree of transparency now expectedat international level.“Minimising environmental impact”GreenFuture focuses on topics like resourceconservation, recycling and emissions reduction.In line with its Group EnvironmentalPrinciples, this specifically means reducingthe CO 2emissions of the new vehicle fleetand, on the production side, significantlylowering energy and water consumption, aswell as waste volumes and emissions.The principle behind this is ‘prevention, thenrecovery, then disposal.’ Michael Oeljeklaus,ŠKODA Board of Management member forProduction and Logistics elaborates: “Wemust minimise environmental impact as faras possible – from vehicle development allthe way through to professional recycling.With GreenFuture, we have established thisas a standard within the organisation.”222012 – A Škoda year in review

As a sustainably responsible company,ŠKODA AUTO sets high standards for productionin particular. Optimised pollutionprotection, water consumption, groundwaterprotection and waste prevention arerelevant in this area. Project manager Vacekregards production as a focal point for thework of GreenFuture: “Further optimisationof production processes is a top priority. Wesee plenty of potential to enhance environmentalprotection and reduce energy consumptionin this area.”Use of the latest technology will facilitatethis: In October 2012, ŠKODA AUTO installedan ultra-energy-efficient PXL servo presssystem for stamping sheet metal parts at itsMladá Boleslav plant. What is special aboutthis system is that the energy released fromthe stamping process can be reused. In continuousoperation, this consumes around 15percent less energy.All areas of production are assessed fortheir potential for environmental protection,which is then exploited as quickly as possible:For example, the EDIS project (Czechabbreviation for Ekologická Doprava InterníŠKODA) launched in 2011, which aims to reduceinternal transport between Companylocations through process optimisation, andlimit environmental impact by introducingelectrically-powered trailers.Product responsibility is ahigh priorityEnvironmental considerations play an importantrole in production at ŠKODA AUTO,and also, traditionally, in the products themselves.ŠKODA vehicles have had a high levelof efficiency, low fuel consumption and lowemissions for many years. More than 50 vehiclesin the current ŠKODA model line-upproduce less than 120 g CO 2/km. Any potentialfor enhancing environmental compatibilityis consistently exploited, and thereforeweight reduction to minimise consumptionand emissions is also a priority in all newvehicle development. For example, the new,third-generation ŠKODA Octavia, launched inearly 2013, weighs up to 102 kg less than theprevious model, thanks to consistent lightweighttechnology, advanced body and engineconstruction, the use of high-strengthand extremely high-strength steels andcareful choice of materials.Since 2010, there has been at least oneGreenLine variant in each model series thatoffers even higher standards of efficiencyand environmental-compatibility at thesame level of comfort and performance.ŠKODA also pursues the goal of lower fuelconsumption and emissions with the Greentec package, which is available throughoutthe entire model range and includes an automaticstart/stop system, brake energy regenerationand tyres with optimised rollingresistance for even greener, more fuel-efficientdriving.ŠKODA also has the key future topic ofe-mobi lity firmly in its sights. It is currentlytesting a fleet of ten electric-poweredŠKODA Octavia Green E Line cars in everydaydriving conditions. Initial findings willbecome available over the course of 2013.The Company aims to have low-emissionvehicles ready for series production as soonas possible. The test fleet is an importantmilestone along this route.2012 – A Škoda year in review 23

SustainabilityProduct responsibility does not end forŠKODA with the sale of its cars, but extendsthrough the end of the vehicle lifecycle andbeyond: All current new vehicles are at least85% recyclable and 95% recoverable. ŠKODAAUTO attaches particular importance to theuse of recycled, i.e. recovered materials, toreplace increasingly scarce and expensiveprimary raw materials.‘Employer of the Decade’In an international company like ŠKODAAUTO, what applies to production and productsis also relevant in the social field. Asone of the leading companies in the CzechRepublic, ŠKODA AUTO has a special responsibilitytowards its employees, their familiesand people living in the communities whereits plants are located. Issues like vocationaland professional training, industrial safetyand health protection, work-life balance andequal opportunities are the cornerstonesof its responsibility towards employees.Low attrition rates and an above-averagelength of service of 12.5 years are proof ofits success and confirm the attractiveness ofŠKODA AUTO as an employer.Resource-SavingIn 2012, as in previous years, ŠKODA AUTOwas again honoured as one of the mostattractive employers in the Czech Republic.The ‘Employer of the Decade’ award presentedby the Czech Employers’ Associationnot only recognised the Company’s qualitiesand attractiveness as an employer, but alsothe long-term stability of its human resourcespolicy.ŠKODA AUTO as a ‘goodneighbour’ŠKODA AUTO has traditionally focused itssocial responsibility on areas where theCompany has operations. Its social and humanitarianprojects are often collaborationswith renowned foundations and charitableorganisations. For example, ŠKODA AUTO haspartnered for many years with the ‘HealthyClowns’ project, which arranges for clownsto visit and entertain seriously-ill childrenthroughout the Czech Republic in hospitalsand at home.RecyclingHowever, the Company is not just activein the social field in the Czech Republic.Through its subsidiaries, ŠKODA AUTO is alsoinvolved in a large number of projects focusedprimarily on children’s health and education,for example, in Germany and India.ŠKODA AUTO has been committed to roadsafety and ensuring safe school routes, inparticular, for many years and works with anumber of Czech municipalities in this field.The Company also extends this commitmentbeyond the borders of the Czech Republicthrough its ‘Playful ŠKODA’ website, wherechildren can learn everything they needto know about road safety in a fun way inCzech, Slovakian, English or Russian.Promoting culture at CompanylocationsAt ŠKODA AUTO, responsibility towards thecommunity also includes contributing tocultural life in the areas where it is based.ŠKODA AUTO has a long tradition of culturalcommitment in the Czech Republic, wherethe Company supports leading cultural institutions,such as the Czech Philharmonic andthe National Theatre in Prague, the NationalMuseum and the National Technical Museum.ŠKODA AUTO also sponsors a variety of acclaimedinternational events, such as jazzconcerts in Germany, for instance. The Company’sincreasing internationalisation is alsoreflected in its growing cultural commitmentin India, for example, where ŠKODA vehiclesare produced at plants in Aurangabad andPune. In addition to its active support for localschool projects, ŠKODA AUTO establishedGreenFutureEmission-ReductionsEnvironmental Protection24 2012 – A Škoda year in review

The ŠKODA 120-gram fleet:More than 50 models currently boast CO 2emissions of less than 120g/km.the annual ‘ŠKODA Prize for Indian ContemporaryArt’ in 2010, with an endowment ofone million rupees, to promote promisingyoung local artists. Each year, thousands ofvisitors attend the exhibition showcasingthe work of these young artists, for whomit is often their first opportunity for exposureand recognition.Citigo 1.0 l – 50 kWMPI CNG‘One car – one tree’ŠKODA AUTO launched another, slightlymore unusual initiative back in 2007: Sincethen, the Company has planted a tree forevery ŠKODA vehicle sold in the Czech Republic,under the motto ‘One car – one tree’.This means that more than 363,000 newtrees have so far been planted – includingmore than 58,000 in 2012 alone. This has apositive impact not only on the landscape,but also on the local microclimate and birdand game populations throughout theCzech Republic.79 g CO 2/km4.4 m 3 natural gas / 100 kmOctavia 1.6 l – 81 kWTDI GreenLineResponsibility as a success factorAt all levels, responsibility at ŠKODA AUTO isnot confined to pronouncements, but focuseson putting it into practice. Sustainabledevelopment goes hand in hand with environmentalresponsibility. That is why, forChairman of the Board of Management Prof.Dr. h.c. Vahland, there can be no alternativeto sustainable development for ŠKODAAUTO, particularly in times of economicgrowth: “The more successful we become,the greater our responsibility.”87 g CO 2/km3.3 l Diesel / 100 km *Superb 1.6 l – 77 kWTDI GreenLine* This applies for the GreenLineversion, which will be introducedonto the market in the courseof the year 2013.114 g CO 2/km4.4 l Diesel / 100 km2012 – A Škoda year in review 25

26 2012 – A Škoda year in review

ŠKODA RapidŠKODA Rapid –a new class of ŠKODANew goals call for a new approach – and the new ŠKODA Rapid is just such an approach.With this car, ŠKODA is redefining the compact sedan – offering generous space in an extremely compact package,a totally new ŠKODA design language and many detail solutions presented for the first time.Positioned between the ŠKODA Fabia and the new ŠKODA Octavia, the ŠKODA Rapid is consistent in designand ‘Simply Clever’ at the same time.The new class of ŠKODA makes its world debut at the 2012 ParisMotor Show: Two ŠKODA Rapid cars drive onto the stage – one metallic-blue,the other white – and into the gleaming stage-lights amida rain of camera flashes and thunderous applause. It is immediatelyapparent that this car will set a new benchmark: First, there is thefresh design language that will define all future ŠKODA models: modern,elegant and powerful – with a clear tornado line and a new logo.And then there is the obvious commitment to redefining spaciousnessin the compact class: impressive interior dimensions inside acompact body just 4.48 m long, 1.71 m wide and 1.46 m high. In thewords of ŠKODA Chairman of the Board of Management Prof. Dr.Winfried Vahland: “The ŠKODA Rapid is a compact sedan with thequalities of an estate car.”Between ŠKODA Fabia and ŠKODA OctaviaThe ŠKODA Rapid is positioned between the ŠKODA Fabia and theŠKODA Octavia – visibly larger than the ŠKODA Fabia, but more compactthan the ŠKODA Octavia. The new ŠKODA offers a huge amountof space for a compact-class vehicle, with legroom and headroomthat are best-in-class. It also boasts the largest luggage compartmentin its segment with a volume of 550 litres and a maximum loadof up to 580 kg. This makes the ŠKODA Rapid the ideal car for modernfamilies – a goal which ŠKODA engineers and designers consistentlypursued from the start. The ŠKODA Rapid can easily and comfortablyaccommodate up to five occupants, and with the largest tailgate inits class, there is still plenty of room for shopping bags and a stroller.It also guarantees typical ŠKODA value for money – both from a purchaseand maintenance perspective.Variants for local marketsReasonable pricing and everyday drivability are important considerationsfor a new car purchase in growth markets, too – and that isexactly where the new ŠKODA Rapid comes in: The new model isdesigned not only for success in Europe, where deliveries began inOctober 2012, but also to appeal to new buyers worldwide. Customisedvariants specially adapted to local needs are offered in marketswith the strongest growth potential, such as China, Russia and India.An Indian variant is already on the market, with a Chinese version tofollow in 2013 and a Russian ŠKODA Rapid in 2014. The ŠKODA Rapidmust quickly gain a foothold in these major markets. The signs look2012 – A Škoda year in review27

Modern, minimalist design with lots of practical detailsat an affordable price: The new ŠKODA Rapid sets new standardsin the compact sedan segment in many areas.promising: In India, for example, the locally-built ŠKODA Rapid variantwas named ‘Family car of the year’ shortly after its market launchat the end of 2011. According to Vahland, “The launch of the ŠKODARapid means we are firing up the next stage of the model offensiveof ŠKODA AUTO. The ŠKODA Rapid has a central importance for ourglobal growth strategy and will provide us with added momentum oninternational markets.”Strong growth potential for compact sedansThe importance of the new model to ŠKODA cannot be overstated.The figures clearly illustrate why the ŠKODA Rapid is such an importantpillar of the ŠKODA growth strategy: The high-volume compactsegment, in which the ŠKODA Rapid is sold, accounts for 36per cent of the global automotive market. Sedans make up 42.3 percent of the vehicles in this class, and industry experts expect world -wide sales of this vehicle type to climb by about 50 per cent by 2020.Expectations for the ŠKODA Rapid are clear: It is to become thebrand’s second key volume model, alongside the ŠKODA Octavia.To assure the necessary production capacity, significant investmenthas been made in the expansion and modernisation of productionfacilities at the main plant in Mladá Boleslav, where the ŠKODA Rapidis built.Modern, no-frills designFor a vehicle to do well in different markets worldwide with differentdemands, clear brand recognition is essential. The designers ofthe ŠKODA Rapid faced a difficult task: As the first representativeof the new ŠKODA design language, the ŠKODA Rapid needed tobe instantly recognisable as a ŠKODA, but with its own model-specificidentity and a style that would satisfy the differing aesthetic28 2012 – A Škoda year in review

ŠKODA RapidA fascinatingglimpse behind thescenes of modeldevelopment:A clay model of theŠKODA Rapid waspresented at the2012 Designblokfestival in Prague.standards of global buyers. Thesolution is a modern look withoutfrills and a design that supportsthe vehicle’s high standardof functionality. Head designerJozef Kabaň summarises his jobas “creating space in its most attractiveform”.Technology at theservice of peopleThe highest technological standardsmust also be fulfilled.‘Tech nology at the service of people’ was the motto for ŠKODA developmentengineers working to realise a car with the highest levelof functionality and latest safety standards, the lowest weight possibleand reliable technology for advanced, environmentally-friendlyengines. The emphasis was not on what was technically possible,but on what the customers are demanding.Attention was focused on systems for optimum active and passivesafety. As a result, the ŠKODA Rapid went on to earn the top five-starrating in the Euro NCAP crash test for its outstanding level of safety,confirming it as one of the safest vehicles in its class.The chassis was another focal point for ŠKODA engineers. A longwheelbase and especially rigid body structure form the basis forthe ŠKODA Rapid’s excellent driving dynamics and chassis design.This guarantees superb handling and exceptional suspension comfort– all with a view to the high level of everyday drivability a vehiclelike the ŠKODA Rapid needs. The ŠKODA Rapid also offers an exemplarychoice of engines: The latest generation ensures excellent fueleconomy and low emissions with attractive performance. The Greentec package, which is optional for all TSI and TDI engines, furtheroptimises fuel economy and enables even lower emissions, withoutany perceptible loss of performance.Clever – even in the detailsThe ŠKODA Rapid demonstrates its everyday suitability in other features,too: Nifty little details, like the ice scraper in the fuel filler capand plenty of pockets and storage compartments inside make it atypical ŠKODA ‘Simply Clever’ car. The new vehicle features up to 19signature ‘Simply Clever’ solutions, including other firsts, such as asafety vest pouch under the driver’s seat, a waste holder in the sidedoor to keep the interior tidy or the reversible floor covering for theluggage compartment – one side with attractive carpet for daily use,the other with a washable rubber covering for transporting dirtieritems.Modern interpretation of traditional virtuesWith the ŠKODA Rapid, ŠKODA has taken an important step towardsthe future. But its engineers and developers have not forgotten theirŠKODA ‘genes’. The ŠKODA Rapid is an attractive, high-quality car,practical and well-thought-out, which offers exceptional space andvalue for money – in other words, a true ŠKODA. But at the sametime, it reinterprets traditional ŠKODA virtues in a thoroughly modernstyle and shows the way for all of the vehicles ŠKODA will introduceonto the market in the near future as part of its ambitious modeloffensive.2012 – A Škoda year in review29

InternationalisationBreaking downbordersDynamic expansion in growth markets andmajor challenges in Western Europe – that is the currentscenario in the automotive sector. The fast-growing marketsof China, India and Russia are a decisive factor.In a situation like this, long-term success depends on a clear strategy:ŠKODA AUTO is building on the Volkswagen Group’ssolid foundation in these countries – with its ambitious modeloffensive and international growth strategy,the course is set for successful global development.The figures are impressive: By the end of2012, five years after the first ŠKODA rolledoff the assembly line at Shanghai Volkswagen,the brand cracked the 750,000-deliveriesmark on the Chinese market. About235,700 units were sold in 2012 alone – anincrease of more than seven per cent overthe previous year and more than eight timesthe volume of customer deliveries just fiveyears ago. In other words, China has becomethe largest single market for ŠKODA in ashort period of time and will play a crucialrole in reaching its sales goal of at least 1.5million ŠKODA vehicles per year by 2018.This development is quite remarkable, consideringthat ŠKODA has launched only itsŠKODA Fabia, ŠKODA Octavia and ŠKODASuperb models in China so far. ŠKODA Chairmanof the Board of Management Prof. Dr.h.c. Winfried Vahland refers to this developmentas a “unique success story”. Three additionalmodels with huge sales potential willalso be introduced onto the Chinese marketin 2013: the new ŠKODA Rapid, the ŠKODASuperb Combi and the ŠKODA Yeti. With atotal of five model series then available,ŠKODA aims to increase its market share andset new sales records. This will also require30 2012 – A Škoda year in review

2011 – 2012+ 7.1 %China235,700cars delivered to customersin 2012a targeted increase in the brand’s productioncapacity and the expansion of its retailnetwork from 400 to 600 dealerships overthe medium term – both of which have alreadybegun.When the Volkswagen Group embarkedon its ‘Chinese adventure’ in the mid-1980s through a joint venture with ShanghaiTractor and Automobile Corporation(STAC), the kind of success ŠKODA is currentlyexperiencing in China would haveseemed unthinkable. Now, aging factorieshave been replaced with one of the world’smost state-of-the-art automotive productionfacilities, which testify to the successof those initial, often perilous pioneeringefforts. Contemporaries recall the difficultiesof the early days of automobile manufacturein China, but also the enthusiasmand talent of local Chinese partners: “Withinthe shortest possible time, they got betterand better, and faster and faster at assemblingcars – faster than anywhere elsein the world even – and that is how it stillis today.” Since then, Shanghai Volkswagenhas become an important and reliablepartner for ŠKODA and a major contributorto the brand’s success in China.2012 – A Škoda year in review31

Internationalisation2011 – 2012+ 14.2 %India34,300 cars deliveredto customers in 2012ŠKODA Rapid world premiere in IndiaIn India, ŠKODA has laid a foundation forfurther growth in recent years and is determinedto leverage the potential there. TheIndian sales of ŠKODA increased by 14.2 percent year-on-year, with around 34,300 vehiclesdelivered to customers in 2012. As expected,the ŠKODA Rapid, launched in late2011, played an important part in this. Builtat the Pune plant – and therefore ‘in Indiafor India’ – this compact sedan serves animportant market segment on the subcontinentand meets Indian customers’ growingdemands for spacious smaller cars. Thehighly-respected Indian auto magazine TOPGEAR named the ŠKODA Rapid ‘Family car ofthe year’ shortly after its market launch. TheŠKODA Rapid is the perfect complement tothe current Indian model line-up of ŠKODAFabia, ŠKODA Laura (the Indian variant ofthe ŠKODA Octavia), ŠKODA Yeti and ŠKODASuperb.ŠKODA AUTO has been active in the Indianmarket since 2001, when it opened its ownproduction facility in Aurangabad. Sincethen, the ŠKODA brand has reported steadilyincreasing sales and market share in thiskey growth market. 2012 was the most successfulyear to date for ŠKODA on the Indiansubcontinent in terms of deliveries. Furtherinvestment is planned in conjunction withthe Volkswagen Group: Local suppliers areto be more closely integrated and additionallocal employees recruited. A total of 90 dealershipsform a reliable backbone for the solidmarket presence of ŠKODA in India and willensure the brand’s continued success in theIndian market.Ambitious goals for RussiaŠKODA has operated in Russia as ŠKODAAUTO RUSSIA since 2004. Over that period,Russian sales of ŠKODA vehicles have risenmore than eightfold to reach around 99,100vehicles in 2012. This represents a marketshare of more than 3.6 per cent and an increaseof 33.7 per cent over the previousyear.ŠKODA Chairman of the Board of ManagementProf. Dr. h.c. Winfried Vahland wantsRussia to play an even bigger role in the future.For him, the Russian market is “a pillarof our international growth plans”. WinfriedVahland announced a series of measures toboost ŠKODA sales in Russia, currently oneof the fastest-growing markets worldwide.In Russia – as in China and India – the newŠKODA Rapid will play an important role infulfilling the Company’s ambitious growthtargets. The ŠKODA Rapid will be built at theKaluga plant as the brand’s sixth model seriesin Russia in 2014. It will establish itselfas a volume model alongside the successfulŠKODA Octavia, which currently accounts formore than half of all ŠKODA vehicles sold inRussia.Another milestone on the road to evengreater success in Russia will be the start ofproduction of the ŠKODA Yeti in cooperationwith the Russian GAZ Group at its plant inNizhny Novgorod. The ŠKODA Yeti is alreadyin strong demand also in other countries.Its high level of everyday driveability in extremeweather conditions, both on-road andoff, make this the ideal car for the Russianmarket. No fewer than 17,000 ŠKODA Yetivehicles were sold to customers in Russia in2012.The ŠKODA Yeti is also the focus of a marketingcampaign to strengthen the presenceof ŠKODA in the Russian market. Aspecial-edition ŠKODA Yeti Sochi has beendesigned for the 2014 Winter Olympic Gamesin Sochi, Russia, which ŠKODA is supportingas part of Volkswagen Group Russia’s sponsorshipcommitment. The new variant wasofficially presented for the first time at theMoscow International Motor Show in August/32 2012 – A Škoda year in review

Russia2011 – 2012+ 33.7 %99,100cars delivered to customers in 2012September 2012. This Winter-Olympic sponsorshipis the perfect complement to thebrand’s long-standing sponsorship of theIce Hockey World Championships – a sportwhich is especially popular in Russia and thehome country of ŠKODA AUTO, the CzechRepublic. The Olympic sponsorship will helpraise the brand profile in Russia.Despite its focus on growth regions, ŠKODAAUTO is also targeting continued growth inits traditional markets. Amid a difficult overalleconomic situation in a number of Europeancountries and a shrinking total Europeanmarket, ŠKODA AUTO was able to increaseits share of the total European market tomore than 3.9 per cent in 2012, with the saleof more than 619,500 vehicles.Effective internationalisation morethan short-term successFor ŠKODA AUTO, successful internationalisationis not just about short-term salessuccess. A deeper understanding of a market’speople, history, culture and customshelps avoid conflict and makes it easier towork with local employees.The Company has established an ambitioustraining and support programme to enhancethe social and intercultural competences ofŠKODA employees working abroad, who areknown as Foreign Service Employees (alsosee interview with Board of Managementmember for Human Resources BohdanWojnar). In the context of increasing internationalisation,the familiar slogan of ŠKODA,‘Clever engineering with a human touch’,takes on additional significance for the future.International by traditionBoth Václav Laurin and Václav Klement, thefounders of the company L&K, from whichŠKODA AUTO was born, showed curiosityand courage in discovering new markets fortheir vehicles. Their success proved themright: L&K motor cars were exported all theway to Russia and Japan. Much of what waslearned in the early years of the automobileindustry at the start of the twentieth centuryhas become part of the ŠKODA brand tradition– and can now be rediscovered in therecently re-opened ŠKODA Muzeum in MladáBoleslav. Even though much more rigorousplanning goes into building the global presenceof a modern automobile brand thesedays, a whiff of adventure remains – everytime borders come down and new marketsopen up. The same principle still holds truetoday: Who dares wins.2012 – A Škoda year in review33

InterviewŠKODA Board of Management member for Human Resources Bohdan Wojnar“Employees are ambassadorsof our brand abroad”Highly-motivated, well-educated employees with the ability to work anywhere are thebackbone of the ŠKODA growth strategy. At the same time, growth and internationalisationpresent special challenges for personnel planning and development.Mr Wojnar, where do you see the focusof personnel development at ŠKODA AUTOin the future?Our Company’s increasing international orientationrequires appropriate vocationaland professional training for employees andmeans that we have to step up our effortsto recruit globally-minded ‘local talent’ at ourvarious locations.For precisely that reason: New impressionsand challenges are always a valuable personalexperience – something no one cantake away from you. That can be extremelybeneficial for young people later in theircareer. And, remember, our employees aren’tleft to fend for themselves while they areabroad – we give them all the support theycould possibly need.What have you done so far?We are especially proud of the dynamicgrowth of our programme for employeesabroad that we launched several years ago.We have been able to double the number ofemployees working abroad. 2012 we reachedthe mark of 200 employees working in othercountries – more than ever have been employedbefore.Where do these Foreign Service Employeeswork?For example in Russia, China and India. Butwe also have FSEs working in Germany, Polandand Slovakia. And, of course, we haveforeign employees coming to work for usin the Czech Republic, too. This kind ofexchange benefits our corporate culturetremendously.What special qualifications does a ForeignService Employee need?Employees who work abroad for ŠKODAAUTO need good social skills and they needto be especially open-minded when it comesto dealing with other cultures – in additionto the relevant job-specific know-how. Theability to work in a team, assertiveness,self-assurance and a high degree of adaptabilityare all important factors – not to mentioninitiative and a strong commitment tothe task at hand and loyalty to our Company.The job of an employee abroad isn’t alwayseasy – living far from home, facing newand unfamiliar challenges every day. Whyis working abroad still such an attractiveprospect?What kind of support exactly?We set up a ‘Partner Support Programme’, forexample, to help with the delegate’s familyand personal needs. All of our FSEs are guaranteedreintegration and an appropriate jobwhen they return to their home base. Wehandle healthcare and many other aspects.We do a lot to prepare our employees fortheir work abroad – and we have a wholerange of support measures for their timeabroad and after.Where does the FSE programme go fromhere?ŠKODA AUTO has a clear strategy that callsfor continued growth in international marketsover the coming years. This will makethe FSE programme even more important.We want our employees to be ambassadorsfor the brand abroad. Enabling them is a vitalobligation for us, and we will continue tochannel all our expertise into this task inthe future.34 2012 – A Škoda year in review

01 02 03 04 05 06 07 08 09 10 11 12ŠKODAHighlights2012New models, new motorsports successes,new sales records: For ŠKODA AUTO, 2012was one of the most eventful years in its recenthistory: Epic rally wins, a promising start toa unique model offensive and new sales recordsin markets worldwide marked the route ofa successful automobile company on its wayto the next level. Following a brief overviewof the year’s key events.2012 – A Škoda year in review35

Highlights 20120102 03March 2 More than 363,000 trees planted— The environmental project ‘One car – onetree’ of ŠKODA exceeds all expectations withmore than 363,000 trees planted in just sixyears. For every ŠKODA it sells, the Companyplants a tree in its home country. More than58,000 trees were planted in 2012. Thanks tothis project, strong ŠKODA sales also benefitnature directly. Priority is given to areasparticularly at risk for water and wind erosionand landslides.January 10 ŠKODA sets more new records— ŠKODA announces initial figures for 2011with a new delivery record: Brand salesclimbed by 15.3 per cent to a new high of879,200 vehicles. Global market share roseto more than 1.4 per cent.January 30 14 million ŠKODA cars —A total of 14 million ŠKODA vehicles havebeen built since the Company was foundedin 1895. The 14-millionth car rolled off theassembly line at the Kvasiny plant in theCzech Republic: a ŠKODA Superb 2.0 TDI‘Laurin & Klement’ special edition. Almosttwo-thirds of the ŠKODA cars built havebeen manufactured and sold in the last 20years, including four million in the past fiveyears alone. 2011 set a new sales record ofalmost 879,200 vehicles. The Czech brandhas an ambitious growth target: to deliverat least 1.5 million ŠKODA cars a year tocustomers worldwide by 2018.February 13 ŠKODA Citigo preview inLisbon — In test drives and a special presspresentation, media guests from around theworld get a sneak peak at the new ŠKODACitigo, and an exclusive look at the five-doorversion of this sixth ŠKODA model series.The five-door version was officiallypresented at the Geneva Motor Show inMarch and went on sale in Europe in May.The ŠKODA Citigo was named ‘Car of theYear 2012’ in the mini car segment shortlyafter his market launch in the CzechRepublic.March 6 Big day in Geneva: ŠKODA Citigomeets Tiësto — Make way for the newŠKODA Citigo: The innovative small car makesits first major show appearance at the GenevaMotor Show, accompanied by well-knownDJ and producer Tiësto. Both three-door andfive-door ŠKODA Citigo models drive onto thestage under the motto ‘Meet Citigo’.February 20 2012 IRC season gets underwayin the Azores — ŠKODA starts the2012 season of the Intercontinental RallyChallenge (IRC) at the Azores Rally. Its 111years of motorsports history creates quitean obligation: ŠKODA plans to go all outto bring the IRC brand title back to MladáBoleslav for the third consecutive year. 13races lie ahead of the teams in the new IRCseason.36 2012 – A Škoda year in review

04 05 06April 2 Record-breaking sponsorship ofIce Hockey World Championships — Forthe 20th consecutive year, ŠKODA serves asthe main official sponsor of the InternationalIce Hockey Federation (IIHF) world championships,and provides a fleet of 45 ŠKODASuperb estate cars for the 2012 championshipsin Sweden and Finland. The IIHF is anexcellent platform for ŠKODA to presentitself to international sports fans. Its 20thanniversary as main sponsor also earns it aplace in the Guinness Book of Records – forthe longest-running sponsorship of a worldchampionship sporting event.April 17 Preview of China model offensive— ŠKODA previews its upcoming modeloffensive in China at AUTO CHINA 2012 inBeijing. The MissionL concept car offersa foretaste of the new ŠKODA compactsedan, which will be built by ShanghaiVolkswagen from 2013 on and sold in China.With the launch of its new compact sedanand the internationally-successful ŠKODAYeti SUV, the brand will introduce its fourthand fifth model series to China in 2013,targeting further growth in its largest singlemarket.May 4 ŠKODA Fabia: Success times threemillion — ŠKODA builds its three-millionthŠKODA Fabia. The car in question – awhite ŠKODA Fabia GreenLine produced atthe main plant in Mladá Boleslav – is theultra-efficient, especially environmentallyfriendlyversion of the Fabia, ordered by acustomer in Germany.May 24 E-Octavia presented to PragueTechnical University for testing — A testfleet of ten electric-powered ŠKODA OctaviaGreen E Line cars proves its efficiency andpracticality in everyday driving conditions:Among those to receive a test vehicle is thefaculty of transportation at the TechnicalUniversity of Prague, which will study thevehicle’s suitability as part of a researchproject into the use of electric vehicle incity centres. Over the course of the year,additional ŠKODA E-Octavia vehicles will betested by various institutions and companies,including the Prague Castle Administration,the power utilities ŠKO-ENERGOand ČEZ, ŠkoFIN, the Czech Ministry of theEnvironment and the University of Economics,Prague as well as TÜV SÜD Czech.Two families in the Czech Republic are alsotesting the electric Octavia privately.June 18 ŠKODA AUTO once again topCzech company — ŠKODA AUTO is onceagain named ‘most important companyin the Czech Republic’ in the Czech Top100 ranking. ŠKODA AUTO has toppedthe ranking of Czech companies 15 timessince it was introduced in 1994. The ratingconsiders factors such as product quality,social responsibility and attractivenessas an employer alongside companies’ keyeconomic data.June 22 500,000th Superb drives offKvasiny assembly line — The ŠKODASuperb begins a new chapter in its successstory: With a total of 500,000 vehiclesproduced, the Czech manufacturer’s flagshipreaches a new high. The 500,000thvehicle, a white Superb Combi Laurin &Klement edition, rolls off the assembly lineat the ŠKODA plant in Kvasiny. The ŠKODASuperb is sold in 85 countries worldwide,and, since 2009, also in China, where it hasbecome one of the most popular models inits segment within three years of its marketlaunch. In 2011, more than 40 per cent of allSuperb cars sold were delivered to customersin China.2012 – A Škoda year in review37

Highlights 20120708 09July 5 A successful five years in China —ŠKODA celebrates five years of successfulautomobile production in China. 60 monthsafter the start of production of the ŠKODAOctavia at Shanghai Volkswagen (SVW),the Czech manufacturer can be proud of itsimpressive performance in China, with thedelivery of around 750,000 vehicles acrossthe country. China is the largest singlemarket of ŠKODA AUTO and accounts foraround 25 per cent of global ŠKODA sales.The current number of roughly 400 localŠKODA dealerships is set to increase tomore than 600 over the medium term.August 23 Start of series production forŠKODA Rapid — ŠKODA launches productionof the new ŠKODA Rapid compactsedan at its main plant in Mladá Boleslav.Its youngest model series will be introducedonto the European markets from October.September 24 ŠKODA Rapid premieresat Paris Motor Show — The ŠKODA Rapidmakes its world debut at the Paris MotorShow. This is the first time a ŠKODA thatfully reflects the brand’s new design languagevehicle is presented to the generalpublic. The ŠKODA Rapid will play an importantrole in the ŠKODA growth strategy:Country-specific versions make it a particularlyattractive prospect for Europe and thegrowth markets of India, China and Russia.July 9 Presentation of ŠKODA Rapid inBratislava — ŠKODA presents its new modelline, the ŠKODA Rapid compact sedan, forthe first time in Vienna and Bratislava. Thenew member of the ŠKODA model family ispositioned between the ŠKODA Fabia andthe new ŠKODA Octavia. An attractive car forthe whole family, the ŠKODA Rapid will representthe ŠKODA brand in the fast-growingcompact segment.July 12 Record deliveries in first half of2012 — ŠKODA sets a new record in the firsthalf of 2012: Worldwide customer deliveriesrose 8.4 per cent between January andJune 2012 to just over 493,000 units (from454,700 units in the first half of 2011).July 27 Intensive construction duringworks holidays — As part of its growthstrategy, ŠKODA AUTO is expanding andmodernising its three Czech plants duringworks holidays. The main plant in MladáBoleslav is busy preparing the ramp-up ofnew ŠKODA models, while the Vrchlabí plantin Northern Bohemian is gearing up for productionof the DQ200 dual clutch transmission.The Kvasiny factory is also undergoingmodifications to its body shop, paint shop,assembly and other areas.August 24 Special ŠKODA Yeti modelpresented in Moscow — The specialedition ŠKODA Yeti Sochi debuts at theMoscow International Motor Show. Withall-wheel drive, a high-performance engineand seven-speed dual clutch automatictransmission, this version was speciallydeveloped to cope with the often extremeroad conditions and terrain in the Russianmarket. The special model was named afterthe city of Sochi on the Black Sea, which willhost the 2014 Winter Olympic Games.September 25 ŠKODA builds new enginetesting centre — An important milestone inengine development at ŠKODA: The foundationstone is laid for a new engine testingcentre with 21 new engine and componenttesting bays. As part of its growth strategy,ŠKODA is investing more than EUR 34million in the expansion of its existing Technologyand Development Centre in Česana,close to corporate headquarters in MladáBoleslav. This is one of the largest developmentinvestments in the Czech Republiccurrently. The first phase of constructionwill be completed in late 2013.38 2012 – A Škoda year in review

10 11 12November 4 IRC hat-trick — In a repeat ofthe two previous years, ŠKODA brings homeboth the IRC driver’s and manufacturer’stitles in 2012. As in 2011, Andreas Mikkelsenand teammate Ola Fløene are once againthe fastest team in the competition, withŠKODA also taking second and third place.In the manufacturer’s championship, ŠKODAsecures the title three weeks before theseason officially ends.October 6 24,500 visitors to ŠKODA plantKvasiny — Successful open house at theŠKODA plant in Kvasiny: Around 24,500 visitors– ŠKODA employees and their families andfriends, interested residents and fans of thebrand – enjoy a glimpse behind the scenesof ŠKODA production in Eastern Bohemia.ŠKODA Superb and ŠKODA Yeti models arebuilt in Kvasiny, and will be re-joined in early2013 by the ŠKODA Roomster.October 15 ŠKODA plant Vrchlabí beginsDQ200 production — ŠKODA starts productionof the DQ200 dual clutch transmissionfor the Volkswagen Group at its Vrchlabíplant. The state-of-the-art direct shiftgearbox, also known as a DSG, is built intoVolkswagen, Seat and Audi models as wellas ŠKODA brand vehicles. Vrchlabí’s initialcapacity of 1,000 transmissions per day willincrease to up to 1,500 per day by mid-2013.Together with the Volkswagen Group, theCzech manufacturer will invest around EUR170 million to prepare the plant, which willconcentrate on component manufactureonly from the beginning of 2013, for highly-complexDSG-production.November 26 ŠKODA Muzeum reopens asmultimedia brand experience — Openingday for the new ŠKODA Muzeum in MladáBoleslav after roughly nine months of remodelling:The completely redesigned brandshowcase takes visitors on an interactive,multimedia journey through the Company’shistory. The varied and fascinating tour explores117 years of ŠKODA AUTO – as told by46 vehicles, hundreds of exhibits, films, witnessaccounts and documents, presentedin a modern way over 1,800 m 2 of exhibitionspace in historic ŠKODA production halls.This very special museum also includesthe new multifunctional ‘Laurin & KlementForum’ and the trendy café ‘VÁCLAV’.November 28 Top five-star safety ratingfor ŠKODA Rapid — The new ŠKODAcompact sedan earns the top rating in theEuro NCAP crash test for its high level ofsafety. The rating acknowledges the ŠKODARapid’s outstanding performance in theareas of occupant protection for adults andchildren, pedestrian protection and safetysupport systems.December 3 ŠKODA builds new, moreefficient petrol engines — ŠKODA launchesproduction of new petrol engines at itsmain plant in Mladá Boleslav. Maximumproduction capacity for the 1.2 and 1.4 TSIvariants of the EA211 series will reach 2,200units per day. The direct injection engineswill be built into ŠKODA, Audi, Seat andVolkswagen models. The advantages of thenew engines include lighter weight, betterfuel economy and lower emissions.December 6 ŠKODA Yeti productionunderway in Nizhny Novgorod — ŠKODAbegins production of the ŠKODA Yeti atthe GAZ plant in Nizhny Novgorod – whichbecomes the second location in Russia tobuild ŠKODA vehicles.December 11 Introducing the new ŠKODAOctavia — One of the most important datesof the year: ŠKODA presents the new Octaviato the global press in Mladá Boleslav.The ŠKODA Octavia is the ‘heart of theŠKODA brand’ – in fact, the Company’s riseover the past two decades is closely linkedto the success of this model. The thirdgeneration of the ŠKODA bestseller willset new standards for spaciousness,function ality, safety and comfort-enhancingtech nology, as well as design and value formoney in its segment.2012 – A Škoda year in review39

InterviewŠKODA Board of Management member for TechnicalDevelopment Frank Welsch‘Simply Clever’ –a reality throughout the CompanyŠKODA automobiles represent a high level of functionality andeveryday drivability, remarkable spaciousness and outstanding value for money.But a ŠKODA is only a ŠKODA if it has a little something extra:‘Simply Clever’ solutions that make day-to-day driving just a bit more enjoyable.Mr Welsch, ‘Simply Clever’ isa slogan we hear a lot in connectionwith ŠKODA cars. What does‘Simply Clever’ really mean?We at ŠKODA make everydaydriving as enjoyable and easy aspossible for our customers – afterall, life is complicated enoughalready. So, we pack all of ourknow-how into our cars, andfind practical smart solutionsthat have a big impact in day-todaydriving situations.Such as?Take the brand new, third-generationŠKODA Octavia: It is theperfect example of our Company’s‘Simply Clever’ philosophy –and so is the new compact limousineŠKODA Rapid, which wealso presented recently.You mean the ice scraper in thefuel filler cap?That clever little idea was whatpeople talked and wrote a lotabout at the premiere of theŠKODA Rapid. How often haveyou hunted in vain for the icescraper the first time it snows?What else?The ŠKODA Octavia also featuresinnovative fastening elementswhich hold the cargo at everyposition in the boot; a practicalstorage for reflective vest underthe driver’s seat; a multimediaholder that was already a hit inthe new ŠKODA Citigo; a particularlylarge and practical tailgate;a storage for the rear parcelshelf behind the back seats;a reversible floor covering forthe luggage compartment – attractivecarpet on one side andwashable rubber on the other,great for muddy shoes after awalk in the woods…Just tell mewhen to stop!So ‘Simply Clever’ is more thanjust a bright idea dreamed upby a copywriter?Definitely! ‘Simply Clever’ hasbecome something of a way oflife for us – and certainly morethan just a snappy marketingslogan. We at ŠKODA, we don’tjust apply the ‘Simply Clever’ approachto our products – it ismore of a fundamental principlefor the whole company. ‘SimplyClever’ is practised throughoutthe Company and is our guidingprinciple for development. 40 2012 – A Škoda year in review

Clever little details: ŠKODA automobilessurprise time and again with nifty,‚Simply Clever’ ideas that help makeeveryday driving easier – such as holdersfor essential accessoires, an ice scraperin the fuel filler, a 230 V socket behind thearmrest, an always reachable emergencyvest below the driver’s seat andsophisticated solutions for securingitems in the luggage compartment.2012 – A Škoda year in review41

History of ŠKODA AUTORestoring formerglory: The differentphases in therestoration of anautomobile – from‘forgotten oldie’to ‘museum gem’– are on show forall to see in theredesigned ŠKODAMuzeum. The imageshows the chassisof a ŠKODA 422Convertiblefrom 1931 priorto restoration.42 2012 – A Škoda year in review

The fascinationof traditionThe ŠKODA brand has one of the longest traditions in the automobile industry. The eventful and, at times,moving history of the ŠKODA brand can now be experienced at the redesigned ŠKODA Muzeum in Mladá Boleslav,where visitors embark on a fascinating journey through more than 117 years of personal mobility.Take away a brand’s past and you takeaway its future. When ŠKODA became partof the Volkswagen Group in 1991, it was clearto those in positions of responsibility thatthe proud history of the ŠKODA brand mustbe handled with the utmost respect. Manybelieve this carefully-considered approach isthe key to the success of ŠKODA today andthe starting point for the Company’s stronggrowth momentum in recent decades. Thisappreciation of the ŠKODA AUTO tradition isextremely relevant even today. “You can’tovertake without checking your rear-viewmirror,” maintains Michael Oeljeklaus, ŠKODABoard of Management member for Productionand Logistics, in his welcoming remarksat the official opening of the completelyredesigned and remodelled ŠKODAMuzeum on 26 November 2012: There can beno progress without looking back, no growthwithout acknowledging where you havecome from.More than 300 guests attend the Museumopening. On the big screen, a film showsŠKODA history in reverse – starting with thecurrent 2012 models and then racing backto when Václav Laurin and Václav Klement2012 – A Škoda year in review43

History of ŠKODA AUTOThe fascinationof traditionfounded the Company in 1895 – interspersedwith special highlights up on stage.The ŠKODA Muzeum focuses on people andtheir stories, as well as cars and technology– because they are the ones who makeŠKODA history. The Museum tells of theirspecial ties to ŠKODA.A stop is made in 1957, for example: Applausefor former Miss USA, Charlotte Sheffield,who is driven onto the stage in a mintgreenŠKODA Felicia Convertible. Now in herseventies, the former beauty queen madethe trip from Salt Lake City especially toattend the ceremony. With tiara and regalcloak over her shimmering blue dress, shesmiles out from the car: “A beautiful, beautifulcar,” she beams. In 1957, the recently-crownedMiss USA posed for a ŠKODAFelicia advertising campaign in front ofPrague Castle and other locations. At thattime, a trip behind the Iron Curtain was areal adventure for a young American woman.Now, 56 years later, Charlotte Sheffieldhas donated her pink ‘Miss America’-dressto the ŠKODA Muzeum, as a souvenir of thisearly and unconventional form of cross-culturalcollaboration during the cold war. Thehistoric piece now has a prominent positionin a glass showcase entitled ‘Flirting withthe class enemy’.Brand showcaseThere are many more fascinating stories toŠKODA AUTO. The early years, two worldwars, decades of socialist planned economy,and, ultimately, the alliance with Volks wagenin 1991, with steady growth since – there iscertainly plenty of material to choose from.The museum planners’ approach is as follows:Besides displaying historic cars, theaim is to use stories to generate enthusiasmfor ŠKODA – from smaller exhibits in displaycases through to modern touchscreen informationsystems.Steeped in 117 years of production history,the location of the newly-opened museumin the very first production hall of ŠKODAat headquarters in Mladá Boleslav providesan ideal framework in which to presentthe Company: Inside the building, there isno trace of its former function. Now, brightcolours set the tone, and large expanses ofglass focus attention on the historic vehicles:The new ŠKODA Muzeum has becomea dazzling showcase for the ŠKODA brand.The new exhibition architecture was designedand implemented by the JangledNerves team from Stuttgart, headed by Prof.Thomas Hundt. It was especially importantto the experienced museum architect andcommunications expert to create a conceptuallink between history and the modernday: “For me, the exciting and unique thingabout this new museum is the combinationof the historic building and modern interiordesign.” His exhibition concept aims to transformthe museum into a time machine: Thespecial characteristics of each period mustbe made accessible on an intellectual andemotional level. The number of actual vehiclesdisplayed was dramatically reduced toachieve this. The models now on show arethere to represent a specific era and recreatea slice of brand history.Divided into three sections, ‘Tradition’, ‘Evolution’and ‘Precision’, the Museum providesvarious points of access to ŠKODA history.‘Tradition’ shows selected ŠKODA automobilesin the context of their specific time andevents. ‘Evolution’ presents developmentlines and milestones in automotive history.The ‘Precision’ area is particularly interesting:Four vehicles in four different stagesof restoration illustrate the main phaseson the way from an unrestored classic to atop-class car. One of the lucky finds on displayis a rusty ŠKODA 422 Convertible from1931. Next to it, already partly dismantledand ready for rebuilding, stands a so-calledThe new Museumis the ŠKODA brandshowcase: TheCompany’s longand often turbulenthistory is nowdisplayed in anappropriate settingin the completelyremodelledand redesignedpremises.Evidence of 117years of automotivehistory: Old L&Kand ŠKODA brandlogos over the years(centre).Timelessly beautifulcars: A ŠKODAFelicia Convertiblefrom 1957 (bottomleft) and the 1923L&K 300 (bottomright).44 2012 – A Škoda year in review

2012 – A Škoda year in review45

History of ŠKODA AUTOThe fascinationof traditionCompany forefathers VáclavLaurin (centre left) and VáclavKlement (far left) laid the foundationfor the first 117 years ofeventful automotive history atŠKODA. The completely renovatedMuseum in Mladá Boleslavuses a wide range of exhibitsto tell its moving story in detail.The Museum’s large windowfronts also provide an interestingglimpse from outside.The so-called ‘type case’ (right)brings the rich ŠKODA modelhistory to life.‘skeleton’. The ‘metamorphosis’ continues ona third lifting platform, which presents thefirst step in the restoration of a partially rebuiltŠKODA 430 Convertible from 1932. And,finally, the ‘gem’ of the collection, an elegantdark-blue ŠKODA 645 Faux Convertible from1930, which experts have already fully rebuiltin a total of 3,800 hours of work between1998 and 2001.Rich history with a happy futureThe history of ŠKODA AUTO has alwaysbeen inextricably linked to its two, verydifferent, company founders, Václav Laurinand Václav Klement: the engineer Laurin,hardworking and a little reserved, and Klement,the worldly-wise marketing expert,originally a bookseller, who joined forcesto set up a bicycle factory in Mladá Boleslav.Why and how the Company was bornis also explained in detail at the Museum.The story of ŠKODA AUTO begins in late1895, as the two embarked on their adventuretogether with just two workers andan apprentice in a tiny 120 m 2 workshop.The Company expanded quickly, switchedto production of motorcycles, and, thanksto the inventiveness and entrepreneurialcourage of its two founders, soon becamea highly-respected automobile company,initially under the name ‘Laurin und Klement’,or L&K for short.The merger with the Plzeň-based mechanicalengineering company, ŠKODA, in 1925,provided the Company with urgently-neededcapital and secured its future. For awhile, vehicles sported both brand logos.Crucial investment to expand standardisedassembly-line production transformed thefounder-driven, small-series carmaker into afinancially-powerful volume manufacturer –which it remained, right up until World WarII. Then, like many automobile manufacturersin other countries, ŠKODA also had to switchfrom civil automobile production to wartimeproduction.As ŠKODA braved a difficult post-war periodand the political bureaucracy of the plannedeconomy, its creative engineers continuedto set innovative trends in vehicle developmentuntil the mid-1960s. However, bythis time, ŠKODA was increasingly sufferingunder a centrally-directed model policy, lackof capital, and ultimately under the failingcompetitiveness of its cars abroad, until, afterthe Velvet Revolution, Volkswagen Groupacquired ŠKODA in 1991, heralding a new erafor the Company.ŠKODA reveals its treasuresThe brand’s strong sense of tradition isnot only on display in the newly-openedMuseum, but also at the many renownedvintage-car events, where ŠKODA proudly46 2012 – A Škoda year in review

shows off its treasures, often to the amazementof spectators. In countries on theother side of the former Iron Curtain, particularlyGermany, Austria, Switzerland andFrance, years of political division in Europemade it hard for car enthusiasts to follow vehicledevelopment at ŠKODA. Now, they are oftenastonished to discover attractive ŠKODAautomobiles they knew nothing about.ŠKODA attended 34 classic car meets andvintage-car rallies in different countries in2012 alone. Motorsports has been part ofthe ŠKODA brand identity ever since daredevilNarcis Podsedniček raced his L&Kmotorcycle from Paris to Berlin in 1901, andso the ŠKODA collection includes many attractivehistoric race cars and bikes, as wellas sedans and coupés – which need to bemaintained and driven from time to time.By participating in vintage-car rallies today,ŠKODA recalls the names of its many famousfactory drivers, such as Václav Vondřich, OttoHieronimus, Jaroslav Bobek, Václav Bobek,Václav Blahna and John Haugland, and remarkablecars like the ŠKODA Supersport,the ŠKODA 1100 MB, the ŠKODA 130 RS andthe ŠKODA F3.In 2012, for example, a 1932 ŠKODA 860 anda ŠKODA Popular Monte Carlo from 1937 competedin the famous Schloss Bensberg Classics.Also, at the ‘Hamburg-Berlin-Klassik’ carrally, one of the ŠKODA entries among thestarting line-up of 180 vintage cars was a2012 – A Škoda year in review47

The fascinationof traditionŠKODA and racing havealways belonged together.Nowadays, ŠKODA likes toshow off its past treasuresat vintage-car meets andinternational rally events forhistoric cars, including anabsolute rarity: one of onlytwo remaining ŠKODA 1100OHC cars at the SilvrettaClassic (top image).Also pictured: the ŠKODAPopular Monte Carlo (topright) and a ŠKODA 130 inMoscow’s Red Square.51–year-old ŠKODA Felicia Convertible. Mostrecently, ŠKODA entered four of its rarestclassic cars in the ‘Classic Days’ in Magny-Cours,France: one of only three ŠKODARS 200 built in 1974; a ŠKODA 1000 MB from1964; a ŠKODA 1000 MB from 1968; and oneof only two remaining ŠKODA 1100 OHC carsfrom 1957. One of these incredibly elegantcars – which could easily be ascribed to aracing car manufacturer from Italy – alsotook part in the Silvretta Classic, where itwas a hit, as always, with motorsports fans.A museum for the whole familyThis motorsports tradition is also very muchin evidence – both optically and acoustically– at the new ŠKODA Muzeum, wherevideos are used to simulate a racing ambience.Two of the most successful rally carsin ŠKODA history, a modern-day ŠKODA FabiaSuper 2000 and a ŠKODA 130 RS from1977, are on display. The new-look ŠKODAMuzeum offers something for everybody –for car enthusiasts, families and customerscollecting their new ŠKODA fresh off theassembly line in the customer centre nextdoor, as well as tourists. There is plenty tocapture the imagination of younger visitors,too, who may only recently have discoveredthe ŠKODA brand, and many surprisesin store for older guests, who rememberŠKODA from the time before it became partof the Volkswagen Group.With its new museum, ŠKODA AUTO is notonly showcasing the attractiveness of itsown brand. It is also putting Mladá Boleslav,for the past 117 years the town at the heartof the Czech manufacturer, which now doesbusiness in more than 100 countries worldwide,firmly on the map as a major Europeanautomobile manufacturing centre.48 2012 – A Škoda year in review

MotorsportsA truly historicperformanceAfter two successful years in 2010 and 2011, ŠKODA goes on to win a record-breakingthree major international competitions in 2012 – with victories in the Intercontinental Rally Challenge (IRC),the European Rally Championship (ERC) and the Asia-Pacific Rally Championship (APRC). ŠKODAalso notches up a hat-trick in the IRC with its third straight win since 2010 in both drivers’ and manufacturers’championships – in addition to six national rally championships over the course of 2012. The teamis supremely confident: After all, it has the strength of more than 111 years of motorsports history behind it.2012 – A Škoda year in review49

At home on rallycourses around theworld – and oftenvictorious: Success isvirtually guaranteedwith the ŠKODAFabia Super 2000.ŠKODA Teams delivera convincing performanceat the rallys inYpres and along theBosporus as well asin San Remo and theRally of Poland(from left to right).Friday, 12 October 2012: Everything is set for the start of the SanRemo Rally, the last-but-one race of this year’s Intercontinental RallyChallenge (IRC). This potentially decisive race could determinewhether ŠKODA Motorsport’s winning team takes home the prestigiousIRC manufacturers’ title for the third consecutive year.San Remo is known as ‘la Città dei Fiori’, the city of flowers, but, onthis particular day, no-one has eyes for the beautiful floral displaysalong the Ligurian Riviera di Ponente – and certainly not ŠKODA FabiaSuper 2000 factory drivers Jan Kopecký and Juho Hänninen, or, forthat matter, Michal Hrabánek, Head of ŠKODA Motorsport.Four special stages over 85 kilometres, including a 44-kilometrestage by night, are on the programme for the first day of the two-dayrace. Absolute concentration is needed, and the tension is writtenacross the drivers’ faces. Changing weather conditions and fog beforethe race are making the support team nervous: On a day like today,the right choice of tyres is often the difference between victoryand defeat.The race proves challenging throughout the two days of the competition,and many teams fail to cross the finishing line. But it is JanKopecký who ultimately comes in second – enough to secure overallvictory for ŠKODA: The 2012 IRC manufacturers’ title once again goesto ŠKODA Motorsport.Michal Hrabánek stands off to one side. His face shows relief anddelight at the same time: “This hat-trick is a truly historic achievement.We are now the most successful brand in the history of the IRC.That is the best possible reward for the amazing work of all our teammembers,” enthuses Hrabánek, clearly moved.The scene changes: 4 November, Cyprus. The 2012 IRC rally seasonis drawing to a close and headed towards its culmination. In a repeatof last year, the final race of the season will decide the winner of theIRC drivers’ championship.Last year, Andreas Mikkelsen and co-driver Ola Fløene overtook theleading ŠKODA pair of Juho Hänninen and Mikko Markkula in a dramaticseason finish. This time, the two Norwegians, Mikkelsen andFløene, start the race as favourites, with a clear lead in the drivers’competition. Can the 23-year-old Mikkelsen handle this unfamiliarrole and summon up his usual concentration? Cyprus is consideredone of the most challenging courses in the IRC racing cycle, withnarrow, mostly winding roads and unpredictable, rapidly-changingweather conditions.But today, history is in the making: With a resounding second placein Cyprus, Andreas Mikkelsen and Ola Fløene secure overall victory inthe IRC drivers’ championship and become the first team to accomplishthe same feat two years in a row.At the end of the 2012 season, with a total of 27 wins since 2009, theCzech automobile manufacturer is the undisputed IRC record holder.ŠKODA Motorsport’s exceptional successes in recent years are no coincidence.They are the product of sustained hard work. Only thosewho have followed the ŠKODA support team for some time know justhow hard they have worked. It is not just the cars and drivers whohave to deliver top performance – there is no room for compromisebehind the scenes, either. The demands on team members are enormous:Quick thinking and mental strength, even under extreme conditions,are crucial for every member of the ŠKODA Motorsport team– mechanics, drivers and logistics managers alike. Everyone is pushedto their limits – and sometimes beyond – on a day-to-day basis.They seem to need that, too. At ŠKODA Motorsport, the extremesoon becomes the norm: The IRC may be the most prestigious competitionon the international rally circuit – but it is not the only oneŠKODA Motorsport competes in.In 2012, ŠKODA also takes part in – and wins – the European RallyChampionship (ERC) and the Asia-Pacific Championship (APRC).The ŠKODA team’s performance in the APRC creates something ofa sensation. With the team of Australian Chris Atkinson and BelgianStephane Prevot winning the drivers’ competition and thanks to itsoutstanding performance over the entire series, ŠKODA became thewinner in the prestigious APRC manufacturers’ category.The ŠKODA factory team of Juho Hänninen and Mikko Markkula looksjust as comfortable in the ERC, and are already the clear winners withtwo races to go. ŠKODA Motorsport takes this opportunity to introducea talented new member of its racing team, young Finnish driverEsapekka Lappi, at the Rally of Poland: Only 21 years old, Lappi has50 2012 – A Škoda year in review

MotorsportsNo sweet without sweat: The impressive successesof the ŠKODA rally team in recent years are the productof the clear commitment of ŠKODA to its own racingtradition and high degree of professionalism at all levels.Victorious again in the IRC 2012:ŠKODA celebrates a one-two-threein Ireland. In 2012, ŠKODA Motorsportrepeats its success of the previousyear and the year before and hasnow won the IRC manufacture’s titlethree times in a row.2012 – A Škoda year in review51

MotorsportsNight shift: Duringnight stages, serviceteams also haveto work after dark(above and centre) –and the work doesn’tend when the carscross the finishingline. Here the ŠKODAracing team at anautograph session(below).already made quite a name for himself in rallying: His seven wins overthe course of 2012 have earned him the Finnish Rally Championshipand a certain recognition in the rallying arena. However, this timeeverything is new for the likeable Finn: the car, the team – and thecourse. What follows is a clear demonstration of class: NewcomerLappi and co-driver Janne Ferm secure the win in Poland first timeout. The new team wins 10 out of 13 special stages. Victory, it seems,was never in any doubt.ŠKODA Fabia Super 2000 teams not only compete in internationalraces – in 2012, ŠKODA also won a total of six national championships:Reigning Czech champion and ŠKODA driver Jan Kopecký successfullydefended his title with co-driver Pavel Dresler, and five otherŠKODA Fabia Super 2000 drivers also won national competitions:Raimund Baumschlager (Austria); Mark Wallenwein (Germany); AleksHumar (Slovenia); Luca Rossetti (Turkey); and Dimitar Iliev (Bulgaria).What makes ŠKODA Motorsport so successful? Team spirit and a willto win are important, without a doubt – as well as having someonelike Michal Hrabánek in charge, to draw together the many individualstrands into an effective whole. But there seems to be ano ther,barely quantifiable and yet still extremely effective element thatgoes into the winning combination, something that is taken forgranted, and that habit has made an unspoken truth: the power ofthe brand’s own history. When ŠKODA celebrated its 110-year involvementin motorsports in 2011, Chairman of the Board of ManagementProf. Dr. Winfried Vahland talked about how its commitment tomotorsports helps convey the message of the ŠKODA brand. Withtoday’s drivers like Jan Kopecký, Andreas Mikkelsen and EsapekkaLappi, there can be little doubt that its message is being heard andunderstood. Winner of three internationalcompetitions and six nationalchampionships, and once againchampion in the prestigiousIRC manufacturer’s category:ŠKODA raises the bar witha string of successes in 2012.52 2012 – A Škoda year in review

InterviewMichal Hrabánek, Head of ŠKODA Motorsport“Tradition-minded, team-spiritedand hungry for success”2012 brought comfortable victories for ŠKODA in the IRC, European Rally Championshipand Asia-Pacific Rally Championship, not to mention six national rally championships.Michal Hrabánek heads ŠKODA Motorsport. Under his leadership it has become the dominant force on theinternational rallying scene. He talks about responsibility, passion and an uncompromising will to succeed.Michal Hrabánek has beenat the Head of the ŠKODAMotor sport division, with itslong tradition, for more than fiveyears. Before that, the 44-yearold,an expert in technical development,was responsible forthe global sales of ŠKODA GenuineAccessories. ŠKODA sentthe first clear signal of things tocome back in 2009. 2010marked wins in the manufacturer’sand driver’s championshipsof the Intercontinental RallyChallenge (IRC). The ŠKODAteam then went on to repeatthose victories in 2011, and alsoadded the world championshiptitle. 2012 brought even moresuccess for ŠKODA Motorsportthan the previous years, makingit the most successful year todate in long history of ŠKODAMotorsport.Mr Hrabánek, if you had todescribe the special qualities ofŠKODA Motorsport, what wordsspring to mind?Tradition-minded, team-spiritedand hungry for success.What role does the almostlegendary motorsports traditionof ŠKODA play in its sustainedwinning streak over the pastthree years?Tradition may not be a tangibleaspect of our everyday work, butit is still important. ŠKODA Motorsport’long history essentiallygives us the strength and composurewe need to master dayto-daychallenges.How do the mostly youngdrivers handle this tradition?The drivers tend to concentrateon the job at hand. Being a rallydriver is one of the toughestjobs around, and there’s notmuch time for contemplation orreflection. What tradition doesmean to them is this: They knowthe entire team has decades ofrally experience behind it, andthat they can rely on that in thefuture – tradition provides a kindof security, so to speak.What does this job mean foryou personally?It is, quite simply, the realisationof a long-standing personaldream. I couldn’t imagine anybetter job! I can contribute myown experience, I have a toprateteam and the best workingenvironment I could possiblehope for.And what about the successesof recent years – what do theymean to you?Of course, they mean a lot to me.But most of all, they are importantto the team, as confirmationof its outstanding work. ButI’m aware that success is alsoan obligation: As they say, afterthe race is before the race. Wecan’t afford to take things easy.As soon as you get too comfortable,that’s when things start toget difficult. We’ve worked hardto get where we are today. But itis just as much of a challenge tostay at the top – and we will doeverything we can to stay there.ŠKODA took part in the Asia-Pacific Rally for the first time in2012. What was the aim of that?First of all, curiosity and love of anew challenge. Second, it was astrategic decision: Our aim wasto raise the visibility of the ŠKODAbrand in this important growthmarket. Winning on our first timeout should have achieved that.What makes ŠKODA Motorsportso strong?There are many aspects: For astart, the ŠKODA Fabia Super2000 is a first-class, race-provenrally car that is now in itsfifth season. We also have topdrivers and an outstanding serviceteam. But the most crucialaspect, I believe, is the smoothinteraction between all our processes:Much of our strengthcomes from established, welloiledprocesses, combined withthe ability and willingness toimprove that rally racing alwaysrequires. Another importantfactor is our close cooperationand consultation with ŠKODAAUTO – with Technical Development,in particular – and withthe relevant departments of theVolkswagen Group. Here also,our work is characterised by astrong team spirit. That is basicallywhat successful rallying isall about: working as a team onall things, big and small, at nationaland at international level.What are your goals for ŠKODAMotorsport over the comingyears?We always focus on what comesnext – and that means upcomingraces. We want to be as successfulas possible again in 2013.That will require all our attention.We aim to stabilise our currentlevel of performance and, ifwe can, improve on it. Motorsportwill for sure continue toplay an important role in the future.We are all working veryhard in order to make the successstory of ŠKODA Motorsporta lasting one. 2012 – A Škoda year in review53

ŠKODA model seriesProduct portfolioŠKODA SuperbŠKODA Superb CombiŠKODA RapidŠKODA FabiaŠKODA Fabia CombiExceptional quality at anunbeatable price in the uppermid-size class – that is what theŠKODA Superb is all about.Renowned for its spaciousinterior, value for money andeconomy, the contours of theŠKODA Superb are elegant, butsporty. Common sense andpassion are rarely found in suchperfect harmony in a car.The ŠKODA Rapid compact familysedan launched in Europe inautumn of 2012 is the first ŠKODAvehicle to fully implement the newbrand design language: clear,precise and timelessly elegant.The interior is extremely spacious,with lots of clever details. TheŠKODA Rapid, the youngest modelseries of ŠKODA, sets thestandard in a new class for thebrand, the compact sedansegment. With country-specificversions for India and, in thefuture, China and Russia, theŠKODA Rapid is also one of thecentral pillars of the ŠKODAgrowth strategy.With their impressive fueleconomy and efficient use ofspace, the ŠKODA Fabia andŠKODA Fabia Combi have beenamong the best-selling ŠKODAmodels for years. Reliability,highly-efficient engines and anattractive price/performance ratiomake the ŠKODA Fabia the idealchoice for those who particularlyappreciate everyday driveabilityand value for money in a car.54 2012 – A Škoda year in review

With seven model series, ŠKODA AUTO has the right carfor different personal transport needs. All models share the samesignature ŠKODA features of generous space, outstandingeveryday drivability, top quality and impressive value for money.ŠKODA OctaviaŠKODA Octavia CombiŠKODA Citigo ŠKODA Roomster ŠKODA YetiThe ŠKODA Octavia sedan andA small car with a big future: In bigThe ŠKODA Roomster is the mostWith the launch of the ŠKODA YetiCombi estate car are the ‘heart ofcities in particular, the smallestsurprisingly spacious of the ŠKODAin 2009, ŠKODA immediatelythe ŠKODA brand’: No model in theŠKODA – the modern-lookingmodels. As the name suggests,captured a new market segment.ŠKODA brand’s long history hasCitigo launched in 2012 – immedi-the ŠKODA Roomster wasAs one of the very first compactbeen more successful. The ŠKODAately captured the hearts of thosedesigned for roominess – andSUVs on the market, the ŠKODAOctavia has impressed with itswho value agility, economy andspace is the key to its hugeYeti not only caused a sensationtop-quality workmanship, timelesssafety in a car. With its manysuccess. Characterised by clearacross Europe, but was also adesign, ample space and highsurprising little details, the ŠKODAdesign and exceptional interiorsuccess in growth markets suchdegree of functionality since 1996.Citigo epitomises the modernversatility, the ŠKODA Roomsteras Russia, India and – in the futureŠKODA is continuing this traditionconcept of a clever city car that ishas been highly successful in the– China. With optional four-wheelwith the new model presented inalso fun to drive.compact minivan segment sincedrive, the ŠKODA Yeti is also anDecember 2012. The latest ŠKODAits debut in 2006.attractive choice for off-roadOctavia is the best so far. As a cardriving.that offers the qualities of amid-range vehicle for the price of acompact car, the ŠKODA Octavia isa class of its own.2012 – A Škoda year in review55

ŠKODA Media Services– the app foriPhone and iPadwww.skoda-auto.comPublished by:© ŠKODA AUTO a.s., 2013Tř. Václava Klementa 869293 60 Mladá BoleslavCzech Republic