News Analysis: Ridicule to cool: the Skoda story

After years of being lampooned over its naff image, Skoda now wants to be a natural company car choice. Donna Werbner tracks its journey to credibility.

Heard the one about the Skoda company car? No, it is not a joke.

Skoda is about to begin a major PR campaign targeting fleet managers, and has enlisted Golley Slater to help change the way businesses perceive the brand (PRWeek, 8 April). It is eager to show that its cars' low running costs and low CO2 emissions make them 'the practical and sensible choice' for company car buyers.

The move is Skoda's latest effort to distance itself from the scorn levelled at what was a once-prestigious brand. When Skoda began making cars 100 years ago, it was seen as a luxury brand. But in the 1980s, Communist restrictions on the Czech firm's investment in new technology meant it couldn't compete with Western-manufactured cars in the UK.

Skoda's unfashionable design, low cost and poor speed made it a low status symbol. Skoda jokes - how do you double the value of a Skoda? (add fuel), and what do you call a Skoda driver with a speeding ticket? (a dreamer) - soon became part of British culture.

Butt of jokes

'The brand was bread and butter for stand-up comedians everywhere,' says Daily Express motoring editor Nat Barnes. 'But in the past five years, Skoda's image has changed dramatically.'

The impetus behind the change was the huge investment by the Volkswagen Group, which bought a majority stake in Skoda from the Czech government in 1991. VW's first move was to drop the Estelle saloon model, described by the BBC as having 'the handling characteristics of a shopping trolley with a missing wheel'. It focused on upgrading the design of Skoda models and enhancing the quality of their build.

By the late 1990s, Skoda cars were regularly winning industry awards and test-driving automotive trade journalists were enthusing about the new models. Yet despite a launch budget of around £10m, sales of the Octavia family car in 1998 were 'disappointing', with Skoda realising less than one per cent of new car sales and 'no change in brand perception', according to its former agency Sputnik Communications.

'It took a while for consumers to accept that the cars had improved,' admits Skoda UK head of press and PR Catherine Bell. The mistake, she says, was a 'pretty standard' advertising and PR strategy that emphasised Skoda's price and automotive capabilities but didn't address the stigma attached to the marque. The last straw came in 2000 when, despite growing acclaim from the motoring press, The Mirror reported that it was 'still slightly less embarrassing to be seen getting out of the back of a sheep than getting out of the back of a Skoda'.

That was when Skoda changed tack, doubling its two-strong in-house PR team and bringing in Sputnik for PR and Fallon for advertising. Research by Millward Brown had found that 60 per cent of people would not even consider buying a Skoda. The firm decided to confront this with a tongue-in-cheek, self-deprecating ad campaign. 'It's a Skoda. Honest' showed status-conscious people discovering - with surprise - that a car is a Skoda.

'We let people know we knew what they were thinking, then flipped their prejudice on its head,' says Sputnik account director Lucy Rickett. The PR strategy involved targeting 'tipping point' opinion formers on the lifestyle pages of national newspapers and consumer magazines. Sputnik positioned Skodas as stylish cars with performance and driveability to match, highlighting praise from the motoring press and challenging non-conformists, such as Spectator columnist Toby Young, to sample the cars for themselves.

'My line was that because Skoda had such a bad image, anyone who drove one had to be very self-confident,' says Young, who bought the newly launched Skoda Fabia in 2000 after it was recommended in the automotive media.

Making waves

In GQ in 2001, Young wrote that Skoda was 'one of those brands that is so uncool it eventually passes through the fashion equivalent of the fourth dimension and becomes incredibly cool'.

Four years on, he's 'not entirely sure' Skoda managed to become cool.

'It's targeting people who are not too brand conscious, who want value for money and reliability,' he says.

UK sales of Skoda cars shot up from 16,500 in 1997 to nearly 38,000 in 2002. Since then, sales have dipped, with 2004 figures showing a fall of almost 3,000. But sales to companies mark its biggest growth area, rising by 680 per cent since 1998 to more than 10,000 until last year.

For the first time in five years, Skoda's ads have dropped the famous self-deprecating tone. Now they feature a trouser-press chasing a mugger and an overweight gymnast performing difficult acrobatics, with a tagline, 'Practical and exciting. Don't see that very often'.

'A sense of humour remains crucial to brand identity, but we've shifted our tone and emphasis to make a more positive statement about the reasons why people should buy a Skoda,' says Bell.

She hopes a PR campaign to attract fleet buyers and company car drivers will have a positive effect in the private market. But Barnes believes Golley Slater faces a tough challenge convincing fleet managers to buy Skodas. 'Company car drivers are probably the most status-conscious in the land - and car reps are the biggest automotive snobs,' he says.

Golley Slater senior account manager Nick Elliot admits that Skoda has 'still got work to do', but plans to emphasise that the brand offers what fleet managers want most: 'great value, great cars and excellent customer service'.

SMEs, police forces and emergency services will be his biggest target - sales to emergency services rose by 62 per cent in the first quarter of 2005, compared with the first quarter of 2004.

So the driver of a Skoda is still unlikely to get a speeding ticket.

Indeed, that driver could be a police officer engaged in a high-speed chase.

SKODA'S HISTORY

- 1895 Vaclav Laurin and Vaclav Klement begin manufacturing bicycles.

- 1905 The pair's first car, the Voiturette, goes into series production.

- 1925 Laurin and Klement merge their business with Skoda.

- 1946 Skoda is nationalised and Cold War politics leaves Skoda isolated.

- 1991 The Czech government signs Letters of Agreement with the VW Group.

- 1997 The Skoda Octavia is launched in the UK to critical acclaim. But its ad and PR campaigns fail to have an impact.

- 2000 Skoda launches the Fabia and wins What Car? and Auto Express Car of the Year. Sputnik Communications is hired. Ad agency Fallon creates the 'It's a Skoda. Honest' campaign.

- 2001 Sales increase by 7,000.

- 2005 Skoda's sales to companies top 10,000 and market share reaches 1.4 per cent.

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