“There will be a time after coronavirus”

“There will be a time after coronavirus”

ŠKODA CEO Bernhard Maier on the current challenges and consequences of the coronavirus pandemic and looking ahead.

Mr Maier, we’re holding a virtual interview. How is the home office working out?
Surprisingly well. We’re holding our Board meetings virtually, almost all other meetings are
online too, and we also have email and telephone. Still, I’m very much looking forward to
seeing people face to face, which is irreplaceable. Many people are already missing it and
will certainly appreciate it even more when we’re back.

How did you react to the coronavirus crisis in the initial few days at ŠKODA?
In an exceptional situation like this, we needed to act quickly and consistently. We
immediately set up a task force and a crisis management team to bring together all the
relevant information and efficiently establish processes and structures. The health of our
employees and society as a whole was and remains our top priority. Accordingly, on 18
March, we shut down our production at the three Czech factories and adjusted our supply
chains. Our focus is now on making disciplined use of the time during the shutdown and
organising an orderly, gradual restart. Some functions must also be kept running, such as
our power plant or spare parts supply. At the same time, we’re continuing to work on many
projects, such as development. We are fortunate in that many tasks can also be done at
home.


Originally, production was planned to restart on 6 April. Now, you’ve extended the
production stop until 20 April. Why is that?

Because the measures to contain the pandemic have been extended across borders and our
retail operations in the Czech Republic and many other EU countries are still closed. The
functionality of our supply chains and the supply of parts is still not guaranteed. Even if we
were to start up our production now, we would be missing important parts, for example from
suppliers in southern Europe. Given the close links between manufacturers and suppliers,
restarting production should be planned on a pan-European basis.


Let’s assume that production is restarted on 20 April: how do you intend to protect
your employees’ health? The coronavirus is unlikely to be defeated by then.

We’re currently working on a ‘Safe Production’ and ‘Safe Office’ concept to provide the best
possible protection for all our employees and especially those working in close proximity to
one another, for example, in production. The concept includes extensive protective
measures, such as face masks and disinfectants. These are already in place for all those
who are carrying out urgent and necessary work during the shutdown.


How hard has the coronavirus crisis hit ŠKODA?
Our global sales markets have been severely affected. This means that we’re currently
generating very little revenue, while our fixed costs continue to run. This is an enormous
burden. That’s why I very much welcome the fact that the Czech government is providing fast
and unbureaucratic support to the economy in this difficult situation, for example, in the form
of an aid package comparable to the German short-time working allowance. However, such
a measure cannot be unlimited. In the coming days and weeks, it will be crucial for society as
a whole to strike the right balance between providing the best possible protection for citizens
from the virus and securing the economy and jobs.

Can you estimate the financial consequences of the coronavirus pandemic yet?
No, it’s much too early for that. On the positive side, we have been operating profitably and
currently have sufficient liquidity. ŠKODA has posted record results in recent years, and yes,
every car not rolling off the production line at the moment is hurting us. For years, we’ve
been producing at our capacity limit. That’s why, unfortunately, we probably won’t be able to
entirely make up for the loss of production this year. All the more reason for us to hope that
the coronavirus pandemic can be contained as quickly as possible so that we can supply the
many customers waiting for our cars. With our state-of-the-art and comprehensive model
portfolio, we’re in a very good position as soon as the shops reopen, public life will get back
to normal, and the economy will pick up. Despite this challenging situation now, I’m confident
that our company will emerge stronger from it, not least because we’re moving even closer
together as a big ŠKODA family in these times. Now we’re showing what distinguishes us:
solidarity, trust and prudence. I’d like to take this opportunity to express my sincere thanks to
all the Škodians who are handling this situation so well. A special thanks, too, to our social
partner KOVO.

Does that mean you are confident of getting through this crisis without job cuts?
With our Strategy 2025, we defined a clear growth plan for 2015 that is proving effective. We
intend to continue this plan after this very challenging situation. The time after the
coronavirus will come. Our top priority is to keep all Škodians on board for this.
What effects do you expect the coronavirus pandemic to have on the global economy?
The global economy has been severely affected with its globally networked trade flows.
Nobody can accurately estimate the effects yet; they will be greater than in the crises of
recent decades. The longer public life and the economy are suspended, the greater the risk
that the general prosperity we’ve built up in recent years will erode. That’s why the only way
we will overcome this challenge together is with a coordinated international effort. The
solidarity we need to compensate for the damage caused will have to be even greater than it
is now.


What do you mean by that exactly?
Now it is even more important to have pan-European cohesion so that we can get back on
track after the crisis. I think it’s right, for example, to discuss Eurobonds or alternative
measures that will strengthen our European Union in the long term. At ŠKODA, we’re part of
a globally active Group that has its roots in Germany and Europe. I am convinced that a
strong, united Europe will be indispensable for our economy, for example the free movement
of goods and also our democratic society.


The current situation is very complex, if not incalculable. How can you do any
planning?

We’re working on various scenarios so that we are prepared for all eventualities. Derived
from earlier developments in health crises, one possible scenario is described by the experts
as a ‘V-scenario’. This would be a development that is still manageable. According to this
scenario, we would be confronted with a major slump in the short term but will emerge from it
quickly and even stronger. We are currently seeing the first signs of such a scenario in
China. I’m convinced that we can also manage this in Europe – with the right protective
measures for people, but above all, with the right attitude. In addition, the respective
governments will have to provide considerable stimuli in the form of support programmes and
loans for the time after. I am glad that many EU countries are already discussing such
measures. This is the only way to make the ‘V-scenario’ even conceivable. There’s a lot at stake. Nations acting in their own self-interest is not the way to achieve the necessary
balance between humanity, morality and the economy as the foundation of life.
 

Companies are providing support for society in various ways, too. What is ŠKODA
doing?

We’re helping in several ways. For example, our Technical Development Department is
producing 3D-printed reusable FFP3 respirators in collaboration with the Research and
Innovation Centre on Advanced Industrial Production (RICAIP) and the Czech Institute of
Informatics, Robotics and Cybernetics (CIIRC), which are urgently needed in Czech
hospitals. We’re also providing a fleet of 150 e-scooters via the ŠKODA Digilab platform
BeRider and more than 200 ŠKODAs for medical support and for people in urgent need of
mobility. In India, too, where we’re responsible for the Group, our colleagues at the Pune
plant are producing face shields that are being donated to doctors.
 

How is the coronavirus crisis affecting your e-mobility strategy?
At the moment, we’re sticking to our plans: By the end of 2022, we will have ten partially or
fully electric models in our range. By the end of this year, we will have introduced the
ENYAQ iV, our first all-electric car, which was designed as such from the outset.
 

What have you personally learned from the crisis?
I can think of a few things: For example, we should never take anything for granted,
especially the simple and most basic things in our daily lives. This time gives us a new sense
of appreciation for them. When it comes to communication and digitalisation, I’ve noticed that
we’re already much further along than we might have thought before the coronavirus crisis.
We can adapt very quickly to new forms of work. We’ll continue to take full advantage of this
efficiency in digital communication when this is over. And finally, after the crisis, we may find
paradoxically that the virus – although now physically creating more distance between us –
brings us all closer together. And that’s why, despite all the current uncertainty, I can say one
thing is certain: every crisis – even this one – presents an opportunity for us all.

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Group profile


In existence since 1805, and across family generations, D’Ieteren seeks growth and value creation by pursuing a strategy on the long term for its businesses and actively encouraging and supporting them to develop their position in their industry or in their geographies. The Group has currently three activities articulated around strong brands:

 

D'Ieteren Auto distributes Volkswagen, Audi, SEAT, Škoda, Bentley, Lamborghini, Bugatti, Porsche and Yamaha vehicles in Belgium. It is the country's number one car distributor, with a market share of around 21% and 1.2 million vehicles on the road. Sales and adjusted operating result reached respectively EUR 3.4 billion and EUR 113.0 million in 2018.

 

Belron (54.10% owned) has a clear purpose: “making a difference by solving people’s problems with real care”. It is the worldwide leader in vehicle glass repair and replacement and operates in 35 countries, through wholly owned businesses and franchises, with market leading brands – including Carglass®, Safelite® and Autoglass®. In addition, Belron manages vehicle glass and other insurance claims on behalf of insurance customers. It has also expanded its services into the automotive damage and home damage repair and replacement markets. Sales and adjusted operating result reached respectively EUR 3.8 billion and EUR 225.7 million in FY 2018.

 

Moleskine (100% owned) is a premium and aspirational lifestyle brand which develops and sells iconic branded notebooks and writing, travel and reading accessories through a multichannel distribution strategy across more than 115 countries. Sales and operating result reached respectively EUR 174.1 million and EUR 28.6 million in FY 2018.


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