In 1987, the long-awaited and all-new model, the Škoda Favorit, goes to production. In March, 1991 the company begins a partnership with Volkswagen. Even the company name is new - Škoda, joint-stock automotive company.
Production of the Favorit model series is launched. The transition to the modern concept of front-axle engine, front-wheel drive and compact bodywork with large fifth door takes place in record time. The elegant bodywork was designed by Italian designer Nuccio Bertone.
Škoda Favorit is launched on the market, recording sales success both in Czechoslovakia and abroad.
Following the political regime change in 1989, the company seeks a strong foreign partner to transfer Škoda based on market economic conditions to an internationally competitive company. In December 1990, the Czech Republic chooses Volkswagen.
Škoda, automobilová a. s. com mences its activities and joins with VW, Audi and Seat as the fourth brand of the Volkswagen concern.
There is an ongoing process of improving the quality of production, and all Škoda vehicles receive monopoint fuel injection systems and controlled catalytic converters.
The Škoda Favorit model after more than a million produced vehicles is replaced by the Felicia, the first jointly developed vehicle since the merger with VW. By 2001 the company had produced more than 1.4 million Felicia models.
Mladá Boleslav, the foundation stone is laid for the production plant for the future new model of the middle-class Octavia.