Skoda Stops Production for First Generation Octavia

Skoda decided to temporarily stop production of its first generation Octavia due to sales decline in key markets, Autonews reported. Poor results in Russia, Ukraine and Romania forced the Czech manufacturer to idle its Vrchlabi plant assembly line, Skoda spokesman Jaroslav Cerny told the aforementioned source.

Work on the model will begin again early next month, while second generation Octavia will continue to be assembled throughout this time. The facility in Vrchlabi is the oldest and smallest Skoda plant in the Czech Republic and was recently denied major makeover by mother-company Volkswagen.

Skoda Octavia sales received a blow when Dacia-Renault group released the Logan model in the east European countries. The low cost Logan became an icon for the respective countries and slowly pushed the Octavia towards low market share. The introduction of the second generation of the Octavia, based on the Volkswagen's Group A5 platform further affected sales.

Over all, Skoda did good in the last months of 2008. Even with the threat of the economic crisis at the horizon, the Czech car manufacturer increased its sales in Germany to 121,277 units versus 118,682 in 2007. In addition, the company managed to raise its market share to 3.9 percent from 3.8 percent a year before.

Skoda became part of the Volkswagen group in 1991, after a year long battle between the German manufacturer and Renault. The latter's intention not to produce high value models in the Czech factories tilted the balance in VW's favor.

The company now has several manufacturing and assembly plants, including in Sarajevo, and in the city of Aurangabad, in the western Indian state of Maharashtra.