An indication that the automotive industry is experiencing a huge turmoil is when a brand is famous for its practical, affordable vehicles earns much more money than a brand that It sells some of the most desirable and expensive cars in the world.

This is the situation in Volkswagen AG. Its latest profit report on Friday showed that Skoda’s Mass Sales Unit continues to go amazing, while the Stock Exchange listed, also a subsidiary of Sports Car Porsche AG, as soon as he earns a profit.

Skoda’s operating profits for the second quarter, EUR 739 millionthey were the highest in the history of the Czech company and equivalent to an impressive 9.5% operating performance on sales – levels for which a premium automobile industry would be proud. On the contrary, Porsche car business recorded a ridiculous operating profit 154 million euros. While admittedly this amount includes lump sum remains, it translates into a 1.9% profit margin and represents a huge deterioration compared to the margin of 17.8% announced a year earlier. Porsche is going to publish more detailed details next week.

Usually, automakers selling expensive vehicles have much higher profit margins (thanks to the extremely rich and dedicated customers – Ferrari remains a category alone). But now we are in a world of cars that has come upside downwhere a combination of duties from the US and increasing Chinese competition has humbled global giants such as Porsche, while brands with more regional catering such as Skoda are more calm.

Porsche warned its employees to prepare for further cost cuts and admitted that her business model ‘No longer works in its current form’ In the midst of the fall of sales in China, an inappropriate electric vehicles strategy and the escalating costs of US duties. All the cars that Porsche sells in the US are exported from Europe and political efforts to find an acceptable trade compromise have so far been fruitless. VW administration warned Friday that investors should not assume that The duties are just temporary.

VW’s premium brand also faces similar difficulties. And to deal with its problems in China, she even resorted to the release of a new electric brand for the Chinese market that It does not have its iconic signal with the four rings – a fairly large concession.

On the contrary, VW’s basic mass market brands yield amazingly well. While Skoda sells a mediocre number of vehicles in markets such as India and China, the vast majority of sales are in Europe. The times when Skoda seemed cheap. Today, the brand looks more luxurious, the design is more robust and modern and its range includes quick -sold battery models, such as the SUV ENYAQ. Skoda also benefits from the competitive cost of production and sharing parts with the wider VW group.

Skoda’s performance shows ‘What can be done in this environment with good product in combination with a good cost structure ‘, Financial Director Arno Andlitz stressed in telephone contact with analysts. Indeed, other brands in the VW range could learn from it – including Porsche.

One of the strengths of the widespread, full of VW’s important Empire brands is the ability to offset the difficulties in one part of the higher profit business in another. Overall, US duties and competition from China are, of course, purely negative – Group’s profits in the first half decreased by one -third to 6.7 billion euros and VW reduced its forecasts for profits for the whole year, underlining the need for further costs. But Skoda saved VW from an even more devastating result. Who would imagine it?