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Škoda Works was established as an arms manufacturer in 1859 and Škoda Auto (and its predecessors) is one of five oldest companies that begun producing cars and has an unbroken history (together with Tatra, Daimler, Opel and Peugeot).[4]

The origins of what became Škoda Auto go back to the early 1890s where, like many long-established car manufacturers, a company started out manufacturing bicycles. It was 1894, and 26-year old Václav Klement, who was a bookseller in Mladá Boleslav, in today's Czech Republic, which was then part of Austria-Hungary, was unable to obtain spare parts to repair his German bicycle. Klement returned his bicycle to the manufacturers, Seidel and Naumann, with a letter, in Czech, asking them to carry out repairs, only to receive a reply, in German, stating: "If you would like an answer to your inquiry, you should try writing in a language we can understand". A disgusted Klement, despite not having technical experience, decided to start a bicycle repair shop, which he and Václav Laurin opened in 1895 in Mladá Boleslav. Before going into business partnership with Klement, Laurin was established as a bicycle manufacturer in the nearby town of Turnov. In 1898, after moving to their newly-built factory, the pair bought a Werner "motorcyclist",[nb 1] which was produced by French manufacturer Werner Brothers. Laurin & Klement's first motorcyclette, powered by an engine mounted on the handlebars driving the front wheels, proved dangerous and unreliable—an early incident on it cost Laurin a front tooth. To design a safer machine with its structure around the engine, the pair wrote to German ignition specialist Robert Bosch for advice on a different electromagnetic system. The pair's new Slavia motorcycle made its debut in 1899.