Once the butt of many a joke, Skoda can now enjoy the last laugh in the face of detractors as it overtakes its competitors in central Europe.

Skoda has moved into the fast lane: more cars are now rolling out of the company's factories in the Czech Republic than out of Fiat of Italy's plants in Poland.

For many years Skoda cars, like the Ladas of Russia and Trabants of East Germany, were ridiculed in western Europe for their low quality, matched by low price.

But shortly after the end of the Cold War, western manufacturers like Volkswagen and Fiat invested heavily in the former communist countries.

The injection of capital, teamed with a skilled and motivated workforce, has greatly increased productivity and competitiveness.

Output at Skoda last year increased by a massive 36%, exceeding for the first time the 329,000 cars produced by Fiat Auto in Poland.

But Volkswagen, which owns two thirds of Skoda, is not resting on its laurels. It plans to make half a million cars a year by 2002, to introduce new ranges, and - as has been the strategy since it first invested in 1991 - to move up market.

Skoda's good fortunes rub off

The turnaround in Skoda's fortunes is helping the wider Czech economy.

Component manufacturers are building factories, and foreign sales - which account for well over half the firm's output - are mitigating a sizeable trade deficit.

Such has been the growth at Skoda's new plant in Mlada Boleslaw, that the factory runs 24-hours a day and now has to employ several hundred foreign workers.

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