Skoda Auto to launch three models in India every year
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.