Skoda’s Latest Shows Why Israel’s A Growing Automotive Powerhouse

The debut of the new Scala put a Volkswagen brand’s mouth where its money is

This is the Skoda Scala. It’s an all-new model, and marks the opening of a fresh chapter for Volkswagen’s Czech subsidiary. But what makes the unveiling of the new Scala so unique is less about the car itself, and more about where Skoda chose to present it.

Instead of a press conference at a major international auto show or at its home base near Prague, Skoda lifted the veil off its latest model late last week in Petah Tikva, a suburban satellite of Tel Aviv. And that, to the best of our knowledge, marked the first time that a major automaker has revealed a completely new model to the public for the first time in Israel.

So why Israel, you wonder? The country has no domestic automotive industry to speak of, and isn’t a particularly large market. High tax rates and fuel prices (never mind insurance and maintenance) make car ownership roughly twice as expensive as it would be in America. (Chalk those up to the cost of contending with historically hostile oil-producing neighbors.)

The significance that Israel holds to the automotive industry – and to Skoda and Volkswagen in particular – is far less conventional.

Startup Nation

The small Mediterranean enclave has grown into a global hub for emerging technologies, with more scientists and tech professionals per capita, and more startups, than any other country in the world. With nearly a hundred currently listed, no nation short of the United States and China is home to more companies trading on the NASDAQ. This despite geographic boundaries and a population roughly equal to New Jersey (the fourth smallest and eleventh most populous among US states).

“This country for us is a symbol for change. It’s not a huge country, but the creativity that’s here is really amazing.”

Skoda communications director Jens Katemann

Over 500 of Israel’s startups are focused on transportation technology – six times as many as there were just five years ago. Google made headlines in 2013 when it bought driving-navigation startup Waze for $1.3 billion. But that sum was positively dwarfed last year when Intel acquired autonomous-driving firm Mobileye for over $15 billion. By those standards, the $430 million that German automotive mega-supplier Continental AG paid earlier in 2017 for Argus Cyber Security seems like pocket change.

Wolfsburg to Tel Aviv

Global automakers have also been investing heavily in the country’s automotive technology scene, and few have laid down roots quite as deep as the Volkswagen Group. The German giant has partnered with its local importer Champion Motors (along with Mobileye and support from the Israeli government) to develop the country’s first self-driving ride-hailing service. The “New Mobility in Israel” project builds on the 20% stake that VW holds in Israeli ride-hailing firm Gett, and is earmarked to start early next year before deploying in full by 2022.

Porsche’s IT chief Lutz Meschke perhaps put it best when the sports-car manufacturer (another brand under VW’s vast umbrella) set up shop in Tel Aviv last year, pouring tens of millions into local automotive tech companies: “Israel is a key market for IT experts and engineers. It has more start-ups per capita than any other country in the world. This talent and technological know-how coupled with the great expertise offered by our employees creates the ideal breeding ground for future business models.”

Volkswagen opened its Konnect incubator campus in Tel Aviv earlier this year to foster (and capitalize on) innovation in fields like vehicle connectivity, smart navigation, cyber security, electric mobility, and big data.

“Israel is a benchmark country in innovation, and is considered the ‘nation of startups’, so there is no better place to launch an initiative of this kind,” said Luca de Meo, chief executive of Seat (another Volkswagen brand) upon launching its similar Xplora venture just over a year ago.

Mladá Boleslav to Petah Tikva

Skoda opened a satellite of its DigiLab division in Tel Aviv last year together with Champion Motors, and has by now begun working with a baker’s dozen startups in Israel. It has concrete projects under development with four of them – including Guardian (which specializes in vehicle sensors), Otonomo (mobility data analysis), XM Cyber (cyber security), and artificial-intelligence mobility firm Anagog, in which sister-brand Porsche and rival Mercedes-Benz parent company Daimler have also invested. Skoda’s company-owned college has also partnered with the Coller School of Management at Tel Aviv University.

 “Israel is crucially important for our successful transformation from being purely a car manufacturer into a provider of integral mobility services.” 

Skoda CDO Andre Wehner

 

 

With so much invested in the growing local transportation technology sector, the decision to unveil the new Skoda Scala in Israel doesn’t seem as odd as it might at first blush. “The whole automotive industry right now is really in a big transformation phase – [CEO Bernhard] Maier always says ‘from analog to digital’,” Skoda communications director Jens Katemann told IsraelAutoTech at the unveiling of the Scala. “This country for us is a symbol for change.”

“It’s not a huge country,” said Katemann, “but the creativity that’s here is really amazing.”

It’s a sentiment clearly shared by his colleagues at Skoda headquarters in Mladá Boleslav. “Israel – and in particular Tel Aviv is crucially important for our successful transformation from being purely a car manufacturer into a provider of integral mobility services,” said Skoda’s chief digital officer Andre Wehner in a statement released shortly following the Scala’s debut.

Traditional shape, fresh design

And the vehicle itself? It’s a handsome set of wheels, ushering in a new design language for the brand, inspired by the Czech Republic’s famous cut crystal and previewed by the Vision RS concept it showcased at the Paris Auto Show a couple of months ago.

It’ll be offered with gasoline, diesel, and compressed natural gas engines, displacing between 1.0 and 1.6 liters, and turbocharged to produce between 70 and 150 metric horsepower. (Expect a more potent, performance-oriented RS version to follow.) It offers electronic safety and driver-assistance systems you’d sooner expect to see on higher-end vehicles, as well as standard LED head- and taillights, dashboard infotainment displays as large as 9.2 inches across, and a first-in-class electric tailgate. And of course it encompasses Skoda’s signature “simply clever” features, like an umbrella stashed in the door panel and an ice scraper in the fuel cap.

The new model replaces the notchback Rapid sedan and Rapid Spaceback wagon with a more conventional five-door compact hatchback. That in and of itself ought to help the Czech automaker capture a larger share of a highly competitive market segment. And it’s sure to sell a few of them in Israel, where Skoda stands as the most popular European automotive brand.

All photos copyright 2018 Noah Joseph / IsraelAutoTech

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