The Czech rolling stock manufacturer has experienced a period of notable growth in recent times. The company has secured major contracts, acquired component production facilities, established a digital division, and initiated projects in the areas of hybrid traction and unmanned trams. This trajectory appears to mirror the success of the Swiss Stadler.
Škoda’s progress is the result of a combination of several factors and strategies that have been aligned to created a powerful synergy:
- domestic orders allowed the company to develop EMU production;
- the acquisition of the Finnish plant Transtech, including its technologies, and the development of the plant in Plzeň enabled the company to significantly reinforce its position in the tram market;
- optimisation of the backlog of orders made it possible to concentrate efforts on the passenger rolling stock, while setting aside the locomotive segment;
- the market situation was advantageous for the company, as it, inter alia, restricted access for Russian and Chinese competitors in the EU market.
Today, Škoda is seen as a potential buyer of Talgo. The Czech manufacturer will be able to enter the high-speed market with its technologies, while also benefiting from a new round of the technological development.
Its primary market is now represented by European countries. According to PPF Group, Škoda Group’s backlog of orders has reached €3.2 bln, placing it on the verge of being included in the top 10 global manufacturers in terms of this parameter.
The company’s financial performance has also demonstrated growth. Russian and global rail media outlets have recently published articles highlighting a significant increase of 81% in Škoda’s sales, reaching €1.38 bln in 2023. They, however, did not specify that this figure encompasses both rail transport and other segments.
The publicly available data on sales and their growth includes data for Temsa, the Turkish bus and electric bus manufacturer, which, along with Škoda, belongs to PPF Group. In 2023, Temsa generated revenue of $387.5 mln. Further details of Škoda’s and Temsa’s financial performance are disclosed in our feature on revenue and orders in the railway industry.
The Czech manufacturer might have not secure a number of recent contracts in Europe because Russian companies were going to do so prior to the imposition of the sanctions. As formidable competitors, they supplied products in the same price segment and held strong positions with rolling stock for the 1,520 mm gauge track and in former socialist countries. In 2023, Škoda entered into a contract with the operator Uzbekiston Temir Yollari for the supply of 30 four-car EMUs. At the time of writing, no information is available regarding the current status of implementation.
However, the company is experiencing some challenges, delaying deliveries of new trains to Latvia and facing their failure to operate.
There is also a risk that Škoda may also be affected by the scaling crisis, with the potential for a repetition of the experience of Bombardier Transportation. Despite securing a significant number of orders, including those with low margins, the Canadian company was unable to fulfil them and was ultimately forced to exit the market. Alstom has been responsible for the management of these orders and assets, which it acquired together with Bombardier, for several years.
