Škoda is a proud Czech concern with a long history. It is among a select few automakers who can claim to have been building cars for more than a century. Controlled by Volkswagen since 1989, it sold almost 927 thousand vehicles worldwide in 2024, and has become the fourth best-selling automotive brand in Europe.
Before World War II, Škoda built cars with engines of up to four liters. When Czechoslovakia fell under the Eastern Bloc, such luxury became surplus to requirements. The company was tasked with building vehicles that were cheap to buy and economical to run. The basic idea for the rear-engined Škoda was laid down in 1964, and Škodas would power their rear wheels for more than 20 years hence. These were solid, if stolid, cars, and although they did surprisingly well in rallying, they were hardly the last word in refinement and were noisier than their middling performance might suggest. Car and Driver once called them "a poor copy of a Renault R8."
Rear-engined Škodas were infamous in Britain for their low price and their tendency to swing their tails in inclement weather. Even when Škoda installed a new semi-trailing-arm system in 1985 to replace the rear swing axle, thus quelling the tail happiness once and for all, the damage had been done: The reputation for tricky handling stuck, and the ensuing depreciation threatened to dent the marque's price advantage.
Škoda was not unsuccessful in Britain, selling about 14,500 cars there in 1987; but its price positioning was quite literally at the bottom of the market. Only the Citroën 2CV, Fiat 126, FSO 1300, and Zastava's Yugo were cheaper.
Škoda wanted to move its value proposition upward.
The primary drivers of the Eastern Bloc's automotive industry were Lada, Moskvich, and GAZ in Russia; Wartburg and Trabant in East Germany; FSO in Poland; and Škoda in Czechoslovakia. While Western Europe, America, and Japan moved their small cars to the efficiency of front-wheel drive in the 1970s, all the Eastern Bloc cars clung to rear-wheel drive into the 1980s—save for the two-stroke Wartburg and Trabant, which thanks to the spoils of war in the form of inherited technology from Germany's DKW, had front-wheel drive from the outset.
The first Eastern Bloc front-wheel-drive car in the modern sense of the word was Lada's Samara, launched in December 1984. It was joined by the Moskvich Aleko in 1986, and Ukraine's ZAZ Tavria in 1987.
In July 1987, the Czechs responded.
Ostensibly, the Škoda Favorit was a more cosmopolitan product than the divisive politics of the era might have led one to expect. The styling was by Bertone; the suspension, fine-tuned by Porsche Engineering; and the well-proven 1.3-liter engine, breathed on by British engineers at Riccardo Engineering of Sussex.
Yet when Britain's highly acclaimed CAR magazine put Favorit ahead of the Ford Fiesta, it was not Western wizardry but rather the Czech car's "undeniable appeal, perhaps born of its character shape and low cost," which pushed it over the edge and into credibility, at long last, with the Western press.
Sized between a Ford Fiesta and an Escort, the Favorit offered more width and headroom than a Fiesta. It also matched the Fiesta's contemporary coil-sprung suspension layout and rack-and-pinion steering, while undercutting the Ford in price by a significant ten percent.
The 1.3-liter Favorit had 35 percent more horsepower than the one-liter Fiesta one could (almost) buy for the price. It was an eager unit, with the pleasantly rorty sound befitting an upstart. Cold-start behavior was impeccable; the gear shift was precise when not rushed; the steering was light; the chassis was fluent; and the ride proved pliant, especially on the Goodyear tires standard on British-market cars.
The old rear-engined Škoda sedans had not registered a better drag coefficient of than 0.39; the Favorit rang in at 0.36. This was not as great an improvement as might have been expected, as the angular profile of the car ultimately limited its aerodynamic performance. Mind you, this edgy visage also gave it character. CAR was very complimentary of the styling, calling it "one of the most distinctive small-car designs to emerge from Europe for years… sharp-edged lines and large headlamps are refreshing at a time when many West European manufacturers are rounding off their designs, lowering bonnet lines, and reducing headlamps to narrower dimensions.
"And while bucking these trends, the Favorit still looks a thoroughly modern and pleasing design."
The folding rear seats did not split-fold, but nor did the Fiesta's. In the trunk, a clever rechargeable and removable flashlight doubled as illumination for the cargo area. The Favorit "remembered" wiper delay presets, courtesy a rheostat separate to the wiper switch. This trick would be repeated on the 1992 Volkswagen Golf (III).
If Favorit did well against the Ford Fiesta, it trounced Volkswagen's Polo in everything save for fit and finish. Dowdy, noisy, and slow, the Polo felt heavy to drive and its ride seemed firmer than necessary. For almost 20 percent less, the Favorit was the larger, more powerful, more comfortable car—and it even came with an extra year's worth of warranty.
Volkswagen liked the Favorit so much that in 1991 it bought the company.
After more than a million copies sold between 1988 and 1994, the Favorit was succeeded by the Felicia. A clever facelift by the VW Group's Peter Knapp played down the Favorit's gawkiness while highlighting its satisfyingly chunky shape, whose panels now fit more snuggly and were more smoothly finished. It was more aerodynamic, Knapp having brought the coefficient of drag down to 0.34. Fuel injection gave it slightly more horsepower (68), and Volkswagen engines were also available.
As an indicator of just how good the Favorit was, VW spent just $43 million to transform it into the sleeker Felicia. Most of the mechanicals were retained, and over 70 percent of the components that went into the car were Czech or Slovak.
The 1.3-liter Felicia is today often remembered as the last true Škoda. Subsequent models, such as the Golf-based Octavia sedan, rode Volkswagen platforms. Many traditional Czech suppliers in vital parts such as engines and transmissions would lose Škoda's business as they could not compete in cost and manufacturing capacity. The initial provision at the sale of Škoda to VW, allowing Czech suppliers to deliver parts to Škoda without having to supply the rest of the VW Group, would be superseded.
The Felicia was an honest car that ranked extremely well in customer satisfaction surveys. Škoda would over the next ten years climb sharply in both favor and price, away from bargain-basement transport, to become one of the more desirable brands in the mass-market sector.
Today, the formula behind Škoda's success is deceptively simple: aggressively priced automobiles with solid design cues suggestive of the reassuringly German mechanicals and safety technology that lies underneath, wrapped in a less staid package with a hint of unexpected flair.
Described as "German head, Czech heart," it has been an extremely successful strategy.