Motor vehicles vs. dollars: selling socialist cars in neutral markets. Some evidence from the ŠKODA Auto case.

Abstract

The paper analyses the relationship of Škoda Auto with its dealers in the neutral countries in the years from 1948 to 1964. The takeover by the Czechoslovak Communist Party in 1948 and the rising tensions of the Cold War isolated the Czechoslovak manufacturer from the other European producers. This resulted in a redirection of Škoda exports towards the Soviet Union and the CMEA countries. The paper argues that the technical and commercial relationships maintained by Škoda with its dealers in the neutral countries - in particular Finland, Switzerland, Austria and Sweden - during the First and Second Five-Year Plans, played an important role in stimulating and orienting the modernization of the Czechoslovak automobile production. In this perspective, the letters of grievance received by Škoda and Motokov from their partners are examined. In the late 1950s, these letters, pointing out defects and bottlenecks of both Škoda production processes and products, were used by the technicians responsible of the Czechoslovak motor vehicle industry as a valid learning tool. In the first half of the 1960s, foreign distributors helped Škoda take the first steps in automobile marketing, as well as in designing an assistance system of repair centres and overseas assembly plants based on licensing, fundamental to the establishment of an effective commercial organization.