One of the very first premium carmaker to enter India was Czech auto giant Skoda. It entered the domestic market in the year 2001 with its premium sedan Octavia and since then Skoda has emerged as a value for money premium brand. However, in the number game, Skoda is still a very small player.
The company is focused on consolidating its position to fill the gap between the conventional and the luxury brands and grow on the back of new products and shift in demand for premium cars. Skoda on Thursday (July 13) launched an all-new version of its best-selling sedan Octavia in India with prices starting at Rs. 15.49 lakh.
In an exclusive interview with BW Businessworld, Ashutosh Dixit, Director - sales, service and marketing, Skoda Auto India, talked about Skoda’s short term vision, upcoming launches, electric vehicles and more.
How has been Skoda’s 16-year-old journey in India?
I think it has been exciting. India is a very dynamic market, growing and changing fast. Skoda has been one of the top brands since it entered the market. Octavia was our first car, then Superb, then Yeti. All the cars have done well in their respective segment. Saying this, we have become more focused in the last three years to consolidate our position in the premium car segment.
What will be your roadmap for the next five years?
Five years will be slightly longer to say anything. In the short run, we want to further consolidate and grow in the premium segment. In the first six months of the new year, we have grown at 15 per cent and plans to grow over 30 per cent in the current fiscal. Our focus is clear that cars like Octavia, Superb and Rapid right now and Kodiaq and Octavia RS in future, we want to be in a volume range of 20,000-25,000. More importantly, we want to be in top three of the each segment where we operate.
Going forward, will quality over number be your motto?
The product range we have qualifies us to be in the premium segment. We are happy that we are playing a meaningful role in India. As it goes along, we will continue exploring what more products we can bring India.
Do you have any specific market share target in mind?
Actually, it is very difficult to describe our presence in market share term. India is largely a small car market and that is why we are trying to focus on the segment we are present. It’s really encouraging that we dominate in the segment where we are present. With Superb we are number 1, with Octavia we are number 2 volume wise, and with rapid we are number 4.
Do you have any plans to bring compact SUV in India, something like Yeti?
Skoda had recently announced Karoq which is smaller SUV than Kodiaq. Now we are working on its feasibility for the Indian market.
How confident are you about your bigger SUV Kodiaq, given that the segment is entirely dominated by two established players?
I think Kodiaq is absolutely a great product. It has been a great success since it was launched in Europe and is sold out everywhere. We have no doubt that we will repeat that success in India.
How much India contributes in Skoda’s global sales?
Skoda’s global sale is around 1.2 million cars per year and this year Skoda India will be 18,000 cars.
When will we Skoda reaching a 50,000 or one lakh unit mark in India?
Not in the short run. We don’t have such sales target for the simple reason that India is heavily a small car market. Skoda will benefit from the shift towards premium cars, increase focus on safety and ease up of regulation.
You have made quite a few changes in your sales and service network. Please specify the reason for this and your expansion plan?
We are there were we see feasibility for our brand. Right now we are present in 44 cities with 66 outlets. We will grow it to 70 very soon. Currently, it’s not feasible for Skoda to enter tier-III or tier-IV cities.
Earlier when we had premium hatchback Fabia in our line-up, we had 100 dealerships across the country. Since Fabia was taken out from the market as part of our strategic decision, we have consolidated very well with our partners to be present in the market wherever we have financial feasibility and now we can say it as at a very good optimum level.
Do you have any plans to bring fresh investment in India or increase your current capacity?
We don’t talk about investment. On the capacity part, we have enough to meet the demand for the next few years from our two units based out in Aurangabad and Pune respectively.
Any update on your announced partnership with Tata Motors?
We don’t speak on this.
There is a lot of buzz regarding the electric vehicle policy in India. Do you have any plans to bring EVs in India?
We are watching it carefully. We had showcased our electric car Vision E in the last Shanghai Motorshow, so we have the technology to make EVs. We are watching the market and regulation development to bring EVs in India.
(This article was originally published in BW Businessworld, and is written by Arshad Khan.)