Volkswagen's Reprisals: The Derefinement Of Skoda Begins

Skoda dealers in Europe are up in arms and openly protest plans by Volkswagen to strip Skoda cars to a point where they become unsalable, Automobilwoche [sub] says. Volkswagen denies any stripping. They wouldn’t do something as crude, at least not in public. They “derefine.”

When Volkswagen took a 31 percent share in Czech Skoda in the turbulent year of 1990, it was a step to get a foothold in the Eastern Block. The Eastern Block was already teetering, but was still intact, in a way. Skoda had a good name in the east, and a dealer network. So that was the plan. When Volkswagen became 100 percent owner of Skoda in the year 2000, Hungary, the Czech Republic, and Poland had joined the NATO. It was clear that most of what used to be “Eastern Europe” and part of the now disintegrated Warsaw Pact, would become part of the EU, which it did. The EU now ends some 600 miles east of the Skoda works. Skoda needed a new raison d’être. Not very publicly, they were positioned as the low price entry brand of the Volkswagen empire. The trouble was, Volkswagen didn’t give them any low priced cars to sell, or any budget to develop some. They handed them the existing Volkswagen stable, Polo, Golf, Passat and said: “Don’t spend a lot of money and make the best of it.”

And that’s what the clever Czech engineers did. It quickly became known that a Skoda Superb was a better and yet cheaper Passat, that a Skoda Octavia was a better and yet cheaper Golf, and that a Skoda Fabia was a better and yet cheaper Polo. Quickly, driving a Skoda became a sign of superb intellect: “Who do they think they are kidding? It’s a Volkswagen with more in it and with less out of my pocket.” Skoda became a success, the brand of the smart shopper.

That didn’t sit too well in Wolfsburg. In the beginning of the year, there were moves to put Skoda back in its box. Reinhard Jung, then chairman of Skoda, was being sent into retirement at the youthful age of 59 (gee, Piech is 73.) Jung was replaced by Winfried Vahland, formerly President of Volkswagen Group China, and known for executing the wishes of Wolfsburg without making waves. Having finally arrived, Vahland cleans house at Skoda.

Two weeks ago, Winterkorn said in Paris that it “can’t possibly be that the Fabia has a higher-grade dashboard than the Polo.” Instead of inventing lower cost cars, Volkswagen invented a new word. The “Entfeinerung” or “derefinement.” A new euphemism for the much harsher decontenting.

As a start, Skodas will be stripped of such superfluous details as the A/C or the spare wheel. Even the built-in umbrella that made the Superb famous will be sacrificed to the gods of the Entfeinerung. If you want it, you need to pay for it as an added extra. The sporty Fabia RS had its Xenon lights removed. Can’t even order it at extra charge.

While Vahland is executing Winterkorn’s Entfeinerung orders, the dealers rebell. Thomas Peckruhn, head of the Skoda dealer association said that “nobody should assume that this won’t be noticed by the customer.” Translation: If you rip the heart out of Skoda, you’ll feel it in sales. As far as taking business away from Volkswagen, Peckruhn has a different version: “We capture customers from the French brands, Peugeot, Renault, including Dacia. Volkswagen captures more customers from us than the other way round.”

Knowing Volkswagen, the protests will be for naught. Both Austria and Germany have a long history of treating the Czech Republic as a colony, and have experience in putting down insurrections.

Euphemisms such as the “Entfeinerung” also have a rich tradition at Volkswagen. A dealer cull for instance was no dealer cull. It was a “Vertriebsnetzbereinigung” or “distribution network cleansing.” When the bug had to go, the strategic paper was titled “Die Grosse Entkäferung” , the big debugging. If you want to fire an exec, but decide to wait instead until he dies or retires, then this is called “die biologische Lösung,” the biological solution.

Makes you shudder sometimes.

PS: Last September, Skoda sold 75.790 cars, the best sales in a single month. In the first nine months, worldwide sales climbed 12.8 percent to 568,990 units. Anywhere else, this would be party-time. At Volkswagen, it’s reason for Entfeinerung.