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VW makes Skoda a Czech success

By CNN's Richard Quest

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Quest surveys the Skoda assembly line.
SKODA JOKES

Found on the Web:

Why do Skodas have heated rear windows?
To keep your hands warm when you push them

What do you call a Skoda with two exhaust pipes?
A wheelbarrow

What do you call an open-top Skoda?
A skip

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Skoda back on the road
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Richard Quest
Europe
Prague (Czech Republic)

PRAGUE, Czech Republic (CNN) -- It's hard not to admire the perseverance of some people like Josef. He has three Skodas and battles most of the time to keep then running and on the road.

His first he got in 1968. It was an elderly vehicle even then. The second came after his daughter was born. The third came along with his second wife!

The wife has long gone, but the car -- like many of the Skodas seen in the Czech Republic -- is still there: stalling, belching and rattling along Prague's roads alongside sleek Mercedes, BMWs and Jaguars galore.

Along with very sorry Trabants, Ladas and other relics from the Soviet era, it's enough to make most of us look at cars anew -- and relish the state-of-the-art double cupholders and seats that heat themselves.

But in the Czech Republic, Skoda is looked at very differently. The company, even though it fell on some very miserable times during the eastern bloc days, is still viewed with something approaching wonderment.

It is a company with a proud, century-long history of making everything from bicycles to motorcycles to cars. Just about everyone in the old Czechoslovakia drove one.

Skoda, which actually means "pity," was never going to be able to survive capitalist competition with its noisy, smelly cars. Was Skoda destined to a life of scrap heaps and jokes?

Help and cash arrived soon after the wall came down. Volkswagen of Germany moved in, first buying 30 percent of Skoda then buying the lot. New factories have been built. The Skoda production plant outside Prague is larger than Monaco. New investment in engine plants, production and research and development all helped produce the Octavia, Fabia and Superb models.

The results are now clear to see. Skoda has clawed back nearly half the car market in the Czech Republic and now exports 80 percent of its production to neighboring European countries. The company has even won various awards for its newest models, which car experts say speaks volumes for the improvement in performance.

Unfortunately, that also means it is canabalizing Volkswagen's share of the market for cars like their Golf and Polo. Now parent and child compete head to head -- something that is likely to get more intense as the Skoda name spreads.

Most interesting, unlike many other countries (think Britain and Rolls-Royce), I was surprised to find there is little resentment about a German heavyweight buying one of the Czech Republic's most potent industrial symbols.

Rather, the people I talked to were proud it was such a productive company and cited it as the premiere example of Czech engineering skill. At the massive Skoda plant in Mlada Boleslav outside Prague, one of the engineers we spoke to said it was rare for a German carmaker to entrust the research and development to foreign nationals.

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The Octavia is one of the models leading Skoda's comeback.

Joining the EU won't make a massive difference to Skoda's fortunes. It is essentially a German-owned subsidiary, so it already operates as an EU-based company.

But as Jaroslav Czerny of Skoda told me, it will be a big deal for the psychology and reputation of Skoda overseas. Skoda is a Czech carmaker, and the Czech Republic is now becoming part of the EU.

Where Skoda goes -- even if it is sometimes with a cough, splutter and restart like the old-timers still on the road -- the rest of the Czech Republic will follow. Just keep a few of those old Skodas on the road to remind us how grim motoring can be.

CNN Producer Rachel Brown contributed to this report.


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