Legends of Wheels Part VI: Fallon McElligott 'The Skoda revolution'

This article is the sixth part of the 'Legends of Wheels' Series.

http://boyracer.blogspot.in/2012/04/legends-of-wheels-part-isergio.html
http://boyracer.blogspot.in/2012/04/legends-of-wheels-part-ii-carlos-ghosn.html
http://boyracer.blogspot.in/2012/04/legends-of-wheels-part-iii-lee-iacocca.html
http://boyracer.blogspot.in/2012/05/legends-of-wheels-part-iv-siddharth-lal.html
http://boyracer.blogspot.in/2012/06/legends-of-wheels-part-v-alan-mulally.html

For the sixth edition of 'Legends of Wheels' it has taken me close to a month to compile. Also, this time the issue is not about one person but an agency Fallon McElligot.

Often described as 'the laughing stock' of the automotive world until the late 90's. Skoda's reputation as a carmaker languished until Volkswagen's takeover in 1991. The jokes went something like this

"How do you double the value of a Skoda? Fill up the petrol tank!"

Why do skodas have heated rear windscreens? To keep your hands warm while you are pushing it. 

Why do Skodas have a rear wash wipe ? To remove the flies that crash into them. 

Got a wing mirror for a skoda? Okay, seems like a fair swap 

What do you call a skoda driver who say's he has a speeding ticket ? A Dreamer 

What colour shall I get my skoda in? It doesn't matter, it'll go brown through rust after a week

What do you call a Skoda at the top of a hill? A miracleWhat do you call 2 Skodas at the top of a hill? A mirage. 

Skoda's had a reputation for being unreliable in Europe when VW took over the company. The company was run by the state and quality control was almost absent. Backed by Volkswagen Group expertise and investments, the design—both style and engineering—has improved greatly. The 1994 model Felicia was effectively a reskin of the Favorit, but quality improvements helped, and in the Czech Republic the car was good value for money and became popular. As technical development progressed and attractive new models were brought to market, Škoda's image was initially slow to improve. In the UK, a major turnabout was achieved with the ironic "It is a Škoda, honest" campaign, which was started in the early 2000s.

By 2005 Skoda was selling over 30,000 cars a year in the UK, a market share of over 1%. For the first time in its UK history, a waiting list developed for deliveries by Skoda. Skoda owners in the UK have consistently ranked the brand at or near the top of the J.D. Power customer satisfaction survey since the 2000s.

In truth, Skoda has a rich history and is one of the world's oldest vehicle manufacturers, having been established in the 1890s first building bicycles, then motorcycles and finally cars. It's heyday was before WWII, then as the century evolved, with Communism in charge of what eventually became the Czech Republic, quality, engineering development and performance took a back seat to egalitarian affordability.

Sales started picking up immidiately. The reduction of state intervention and VW inputs also helped as Skoda's upped their reliability and match customer expectations. Six accolades were awarded for work carried out by Škoda’s advertising agency, Fallon, and direct marketing agency, Archibald Ingall Stretton (AIS) in 2002. The gold was awarded for the highly distinctive and popular "It’s a Škoda. Honest" campaign, which dramatically influenced people’s perception of the brand and contributed to Škoda’s rapid sales growth in the UK.y marketing the unreliable history, the company stood at high risk of damaging the little market share they had.  Fallon McElligot benefitted in that VW gave them a free hand with the brands marketing efforts. 

In an ultra-competitive industry suffering from chronic overcapacity, Skoda has proven it has what it takes to compete with the best in the business.  Because of the shortage of skilled labour that affected so many enterprises in socialist societies, Skoda employed many prisoners. They made up 90 per cent of the pressing plant, for instance. When they were freed during political amnesties in January 1990, it left a gaping hole in the factory's labour force: higher wages could not tempt them back. In one of the ironies of history, conscript soldiers were briefly ordered to fill their places but because they were less skilled, production remained far below demand and Skoda's debts, acquired in the 1980s, continued to grow.

Skoda continued selling the Favorit, an Italian-designed hatchback which had debuted in the late 1980s, but it was a stopgap move. Among the many changes were those connected to labour traditions, but there were initial problems. Though Skoda workers were sent to VW's Wolfsburg plant for training, their productivity did not immediately improve. They had adopted a very flexible, improvisatory way of working during Communism which contrasted greatly with those ways demanded by the Japanese methods employed by VW, where precise just-in-time processes were required and the foreman was the absolute boss.

It soon became clear that the methods taught in Wolfsburg would not work on the local production line. There was also irritation that the German managers, skilled only in economics, were overlooking the Czech workers' vast technical skills. "We didn't know a lot about Western advertising or marketing, but we did know how to build cars," one engineer told Pavlinek. After a year, the Germans learned to adapt to and respect Czech ways and productivity began to increase.  The number of defects fell from five per car to less than one, and production of the Favorit jumped as Skoda slowly started to move into profit. 

There was a lot of advertising in Western markets to turn Skoda's image around, admitting old flaws. For the Felicia, the first VW Skoda, the slogan was '548 changes'. The second VW Skoda production, the Octavia, was a hit.  Today Skoda Sells close to a million cars a year and the company has entered various markets worldwide. 

http://eandt.theiet.org/magazine/2009/19/evolution-of-skoda.cfm