Skoda to take up mainstream brand positioning, shed this old tag
Czech car maker Skoda Auto aims to double sales network in India to over 100 locations by 2021 with plans to position itself as a mainstream brand and shed the niche tag going ahead, a senior company official Friday said. The company's wholly-owned arm Skoda Auto India, which on Friday entered into a partnership with ORIX Auto Infrastructure for leasing services, currently has presence in 54 locations across India. "We need to get business ready for 2.0 India strategy and for that we are working on four key areas that include reduction in cost of ownership, improvement in service experience, change in perception that Skoda is expensive to own," Skoda Auto India Director - Sales, Service, and Marketing Zac Hollis told PTI.
The company is also working on increasing brand awareness as well as expansion of network for new set of products that are expected to start rolling out from 2021 onwards. "We are currently represented in 54 cities in India and we need to go over 100 cities. We need to improve the accessibility of the brand from sales and service perspective as part of the India 2.0 plan," Hollis said. When asked about the time frame for expanding the sales infrastructure, he added: "By 2021 to coincide with the launch of two new new products by 2021-22."
Hollis said the company, a part of German auto major Volkswagen group, is also evaluating to bring SUV Karoq to India. Elaborating on the company's long term strategy in India, Hollis said: "Skoda needs to keep moving towards being a mainstream brand in India. We are currently a niche brand in quite niche segments and with 2.0 we will move into much more mainstream segments like mid size SUV segment which is currently one of the fastest growing segments". "Our long term plan, once the first two cars under 2.0 are launched, is to make India become the number five market globally for the Skoda group by 2023," he said.
Currently, the UK is at the fifth position with sales of around 75,000 units annually. Skoda Auto India is way behind, selling only 17,244 units in 2018. When asked about the company's preparedness for the upcoming BS VI emission norms, Hollis said: "We are currently evaluating engine types that are well suited for India." Under the India 2.0 strategy, Volkswagen group plans to roll out four new heavily-localised models in India starting from 2020.
Under India 2.0 project, all models designed and produced locally in the future will be based on Volkswagen Groups MQB platform, and Skoda Auto will launch a volume segment model based on sub-compact MQB A0 platform by 2020. The project is aimed at reviving the fortunes of the group in a highly competitive market that has the potential to grow to over six million cars by 2020. Commenting on the tie-up with ORIX Auto Infrastructure Services Limited (OAIS), a wholly owned subsidiary of Japan's ORIX Corporation, Hollis said the partnership with ORIX reflects its commitment to reach out to its customers through new strategic avenues.
"The tailor-made leasing programme will draw on the strengths of both the companies and deliver an enhanced ownership experience to Skoda Auto customers," he added. As part of the tie-up, the monthly lease rental for Skoda model range will start at Rs 19,856 and cater to retail and corporate customers across segments including salaried individuals, working professionals, small and medium business enterprises, corporate entities, and public sector units or undertakings.As part of the arrangement, lease for up to five years could be availed on company's models -- Rapid, Octavia, Superb and Kodiaq. In the first phase, leasing solutions will be offered exclusively to customers across eight metropolitan cities, namely: Delhi, Mumbai, Pune, Ahmedabad, Bengaluru, Chennai, Kolkata and Hyderabad, before a nationwide roll out in the subsequent phase, as part of the INDIA 2.0 project. "Through this venture, we hope to strengthen the concept of automotive leasing in India and offer tangible benefits to corporates and retail customers, who can now experience superior products and avail the benefits under a range of value-added leasing options," ORIX Auto Infrastructure Services MD and CEO Sandeep Gambhir said.