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At the beginning of December 1895 the mechanic Václav Laurin and the book-seller Václav Klement, both bicycle enthusiasts, started manufacturing bicycles of their own design, patriotically named Slavia in the nationalist atmosphere at the end of the 19th century. A few years later, in 1899, the Laurin & Klement Co. began producing motorcycles, wich were soon successful and gained several racing victories. After initial experiments at the turn of century, motorcycle production was gradually replaced by automobiles from 1905 onwards.
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Like the motorcycles, the 1st Laurin & Klement automobile, the Voiturette A was a great success, and later becoming the archetype of Czech automobile classic. It soon formed a stable position for Company in the developing international automobile market, that allowed the Company to start operating on a wide scale. The volume of the production increased and soon exceeded the potential of a private enterprise. In 1907, the founders of the Company initiated conversion to a joint-stock company. The international character of ŠKODA’s operations became increasingly important. The production facilities were extended constantly and after 1914, ŠKODA took part in the production for the armed force.
Due to the country’s economic development, the joint venture with a strong industrial partner became essential in the 1920s in order to strengthen and modernize the Company, which was at that time producing numerous types of passenger cars, trucks, busses, airplane engines and agricultural machinery. In 1925, fusion with the Pilsen Škoda Co. was accomplished, marking the end of the Laurin & Klement trademark. In early 1930s, the automotive business was reorganized as a separate joint-stock company within the ŠKODA Group (Automobile Industry Co., ASAP). After the crisis, the Company achieved a break-through with the new Škoda Popular.
The German occupation in 1939 to 1945 caused a considerable disruption in the history of the company, which was integrated into the industrial structure of the German Empire. The civilian production programme was immediately limited and production was turned to its needs.
In the course of a large-scale nationalisation which began immediately after the end of the war, the Company became a national enterprise named AZNP in 1946. Within the political and economic changes of that time, it acquired the monopoly of passenger car production.
Based on the traditional production processes and past success, the Czechoslovak economy managed to maintain a relatively good standard in the post/socialist period for several decades, in spite of the changes brought about by planned economy and efforts at unduly rapid growth. This standard only became questionable towards the end of the 1960s due to development of new technology in the western world. The permanent stagnation of the economy started after the seventies, also affecting the Mladá Boleslav automobile manufacturer in spite of the company’s leading position in the East Europe marker. Production grew again only when the model range ŠKODA Favorit went into production in 1987.
After the political changes of 1989, under the new market economy conditions the Government of the Czechoslovak Republic and the management of ŠKODA began to search for a strong foreign partner whose experience and investments would be capable of securing long-range international competitiveness of the company. In December 1990, the Government decided on cooperation with the German Volkswagen Group. The ŠKODA – Volkswagen joint venture began to operate on 16 April 1991 under the name ŠKODA, automobilová a.s., thus becoming the fourth brand of the Volkswagen Group alongside VW, AUDI and SEAT.
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