Skoda Auto to launch three mod­els in In­dia ev­ery year

The Pak Banker - - COMPANIES/BOSS -

Volk­swa­gen Group com­pany Skoda Auto AS plans to launch at least three new mod­els ev­ery year in In­dia as it seeks to boost sales and raise its share in the car mar­ket, a se­nior com­pany ex­ec­u­tive said on Tues­day.

"We will have three new mod­els ev­ery year to align our­selves to lo­cal needs,"said Werner Eich­horn, a mem­ber of the board of man­age­ment for sales and mar­ket­ing, Skoda Auto. The car­maker, which on Tues­day launched a new-gen­er­a­tion Su­perb, has been on the fringes of the In­dian mar­ket, al­though it has been in the coun­try for a decade­and-a-half. In a mar­ket pri­mar­ily driven by new mod­els, Skoda has been slower than its ri­vals. That's some­thing it is try­ing to ad­dress.

With prices start­ing at Rs.22.68 lakh (ex-show­room, Mum­bai), the new ver­sion of Skoda's flag­ship is taller, roomier, more pow­er­ful and more fuel ef­fi­cient than the out­go­ing Su­perb. Skoda is hop­ing to nearly dou­ble Su­perb sales from 1,200 units a year to 2,000 units.

To be sure, Skoda's In­dian arm, Skoda In­dia Pvt. Ltd, has had a rather che­quered his­tory in the coun­try with sales and ser­vice be­ing one of the big­gest pain points. In the 10 months from April 2015 to Jan­uary 2016, the lo­cal arm of the Czech car­maker sold 12,699 units, up 3% from a year ago, ac­cord­ing to lobby group So­ci­ety of In­dian Au­to­mo­bile Man­u­fac­tur­ers (Siam). This was a pe­riod when the broader pas­sen­ger car mar­ket ex­panded 10% to 1.6 mil­lion units.

Eich­horn in­sists the worst is be­hind the com­pany af­ter a phase of con­sol­i­da­tion. "In 2015, we con­sol­i­dated our In­dia busi­ness; worked heav­ily on qual­ity and im­proved brand per­cep­tion. Even with­out a new model we were able to grow our sales," he said. The com­pany is com­mit­ted to the so-called value lux­ury mar­ket in which it sells the Oc­tavia and Su­perb, he said.

"We will grow 10% this year. We can­not dou­ble sales but are look­ing at steady sales," said Eich­horn. The three new cars to be launched ev­ery year will in­clude a re­freshed ver­sion of an ex­ist­ing model, a new-gen­er­a­tion model and a com­pletely new car that will add to the line-up, he said. "Our deal­er­ships are cry­ing for new mod­els," he added, point­ing out that Skoda will soon add a sports util­ity ve­hi­cle (SUV) to its line-up.

The Czech car­maker plans to take the wraps off the seven-seater Ko­diaq SUV at the Geneva Mo­tor Show next month.

The model, Eich­horn said, is ex­pected to come to In­dia in the mid-term.

The com­pany is also work­ing on a thor­ough makeover for the Yeti, the compact SUV launched in In­dia in 2011. It has been a non-starter in In­dia with buy­ers pre­fer­ring more com­pet­i­tively priced, bet­ter de­signed and en­gi­neered SUVs.

The new-gen­er­a­tion Yeti will be com- pletely dif­fer­ent from the ex­ist­ing one with a new de­sign, among other things.

It will also have a variant with au­to­matic trans­mis­sion. With the new Yeti and the all-new SUV, Skoda Auto will have strong prod­uct of­fer­ings in the SUV mar­ket, said Eich­horn.

He did not in­di­cate a time frame within which the mod­els will be in­tro­duced in In­dia. With a sharp fo­cus on the pre­mium seg­ment, Skoda has no plans to bring the new-gen­er­a­tion Fabia (the pre­mium hatch­back it dis­con­tin­ued in In­dia in 2013), in­tro­duced glob­ally in 2014, to In­dia.

En­cour­aged by the po­ten­tial of the seg­ment that is set to out­pace the growth in sales of cars, Skoda's ri­vals have been ag­gres­sively pur­su­ing the SUV mar­ket. Eigh­teen SUVs were un­veiled at the re­cently con­cluded Auto Expo in Greater Noida. Quite a few of them are ex­pected to hit the roads over the next 12 months.

Skoda has been able to main­tain its brand equity in In­dia, but has failed to cap­i­tal­ize on new launches in a sus­tained man­ner, said Puneet Gupta, as­so­ciate di­rec­tor at sales fore­cast­ing and mar­ket re­search firm IHS Au­to­mo­tive. "Some­how they tend to lose mo­men­tum mid-way," he said, cit­ing as an ex­am­ple the new-gen­er­a­tion Oc­tavia, sales of which fiz­zled out af­ter cre­at­ing ini­tial ex­cite­ment. Gupta said the com­pany also needs a prod­uct that gen­er­ates suf­fi­cient sales vol­ume to en­sure its deal­ers re­main vi­able.

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