Its newest model, the Superb, is Skoda's first entry into the luxury executive market in recent times and takes its name from the 30s Skoda Superb.
Fallon's campaign, which breaks on 20 December, continues to challenge consumers to reassess their perception of the brand. The Superb will aim to go up against marques at the more sophisticated end of the car market, such as Lexus and Jaguar.
It will retail between £14,200 and £24,500 and is aimed at company car drivers.
The campaign updates the "It's a Skoda. Honest" strapline to: "This one's a Skoda too. Honest."
"Badges" features a young factory worker on his first day at the Skoda factory. Charged with the job of putting badges on the bonnets of the newly built Skodas he seems to be getting the hang of it, but when the sophisticated executive Superbs come towards him he steps back and lets them pass, thinking they couldn't be Skodas. It is only when the alarm goes off and forces the production line to be reversed that he realises his error.
The campaign was written and art directed by Richard Flintham and Andy McLeod. It was directed by Martin Schmid through Stink. Media planning and buying was through MediaCom.
The ad is the first produced by Fallon since the arrival of Mary Newcombe, Skoda's new head of marketing, who replaced Chris Hawken earlier in the year. Fallon previously produced work for Skoda on the company's Fabia and Octavia models.
Karina Wilsher, an account director at Fallon, said: "This is the latest model story to be told in Skoda's extraordinary resurgence. We wanted to ensure the latest ad nodded to its predecessors, while celebrating the launch of the new car and giving it the stature it deserves."