Škoda: Change my car

CP Proximity

Entry Information

Country where program ran: SPAIN
Program start date: 04/27/12
Program end date: 10/12/12
Advertiser/Client Name: Volkswagen-Audi España S.A.
Product/Service Description: Škoda is an automobile brand that has been a part of the Volkswagen Group since 1991. Originally from the Czech Republic, it positions itself around its good price/quality relationship.
Category: Automotive (AU)

Strategy

Business problem

Spain has been mired in a deep economic crisis since 2008 and the automotive industry has felt the full force of the repercussions. In 2007, 1.6 million cars were sold in Spain; in 2012 that number fell to 700,000 – less than half of that of five years ago. The situation is particularly serious for smaller brands like Škoda whose 2% market share is shrinking because of the crisis. Brands like these have not been able to cope because they can't offer the aggressive discounts like their bigger competitors. Škoda is positioned as a high-quality product thanks to its German technology, but at an affordable price; its defining attributes are its durability and reliability. Though durability and total cost of ownership are very relevant sale attributes during an economic crisis, the situation is so dire that Škoda is suffering sales drops of 30%-40% month after month. To make matters worse, Škoda has never been known for its aesthetics, which in Spain continues to be the number one factor in selecting which make and model will be purchased.