When You Finally Realise A Low Wage Economy is The Reason Why Skoda is Priced Cheaper Than VW



Nicola Hume is the best thing to happen to the Auto Express YouTube channel since its inception. Thankfully Mrs. Hume is not a trained journalist and as a result, comes across as a completely natural presenter. Remember folks, as a side note, journalism schools exist to teach future professional journalists how to lie. Mrs. Hume is a curious individual and during her review of the Skoda Fabia suddenly realizes that it offers a better proposition than the VW Polo.

Mrs. Hume then goes on to reveal that the Fabia is an exercise in product brand washing in so far as it is a Volkswagen Polo in disguise. At this point, Volkswagen’s Product Managers must be pulling their hair out and the Skoda PR people must be facepalming because a journalist isn’t lying on their behalf. Mrs. Hume has revealed the magician’s secrets.

Why is the Skoda cheaper and better than the VW Polo upon which it is based? Mrs. Hume asks herself. Let’s try to work this one out.

The Skoda Fabia is built in the Czech Republic where the average minimum monthly wage is between $500-1000. The country has an annual GDP hovering at around $450 Billion. In Germany, the average monthly wage is around $4,000, and the country’s annual GDP is $4 Trillion. Germany even recorded a budget surplus in 2019.

With all this information to hand we can now conclude the factors involved in making the Skoda Fabia cheaper than the VW Polo… drum roll…

The Czech Republic simply offers lower labor costs. VW doesn’t have a manufacturing base in the Czech Republic because it wants to help the people. It’s purely the result of mergers, acquisitions, and the cold hard reality of doing business.

You could also argue wage suppression is an additional factor that makes the Skoda Fabia price competitive but that’s another argument for another day. And do you what? the Volkswagen Polo progenitor isn’t even made in Germany anymore.

The end.