Skoda Auto, also known as Skoda, a Czech automobile manufacturer in talks as it is planning to outsource production to a contract manufacturer as it looks to respond to booming demand. The automaker stated that demand for its Karoq SUVs and Kodiaq could lead production at Skoda to surge to 2 million cars by about 2025 from 1.2 million currently.

Bernd Osterloh, VW’s labor boss said that shifting some of the Skoda’s production to Germany will not solve bottlenecks.

The automaker said, “There is a wide range of options to cover order peaks”, while adding that advantage of unused capacity in the multi-brand parent Volkswagen Group will not do the trick.

Further, Skoda added, “For that reason, we keep looking into alternatives that also include possible contract manufacturing. Demand is exceeding our production capacities also in 2018”

Sources information stated that the leading as well as major automakers such as Daimler, VW and Germany’s big three BMW routinely use contract manufacturers such as Magna Steyr in Austria to outsource production, earning them greater flexibility while saving investments in their own facilities and resources.

Bernd Osterloh said that a decision on how to boost Skoda’s output will likely be reached by November when VW’s supervisory board is due to ratify the German group’s rolling budget on capacity and some other factors.