BUSINESS
Czech auto maker Skoda is looking at bringing down the development cost of cars in India and make more localised products to boost volumes.
Skoda has not been able to achieve larger volumes in India due to lack of new products, premium pricing and perception issue.
As per the data by Society of Indian Automobile Manufacturers, the company sold 5,692 units in April-August this year, a decline of 32.78% compared with the same period last year.
The company is now realigning strategies to cater to larger customer base in the country.
As part of the plan, Skoda Auto India, the company's local unit, is in the process of bringing down the manufacturing costs of its sedan Rapid, which will bring in better margins for the company and better pricing for the customers.
According to the company officials, the new Indian-version of Rapid is expected to hit the market in the next two years and if the strategy works, it will be replicated for company's future products as well.
"We are working on project Rapid, which is about bringing the costs down. However, we will not compromise on the quality and content on our cars," said Sudhir Rao, managing director for Skoda Auto India.
This is the time that the company is adopting such a strategy in the country.
"Currently, our development costs are very high and everything is developed in Europe. With this, the pricing of Rapid may also come down," said a company official.
Without elaborating much on the new product launches, Skoda said it does not have any plan of launching the European Fabia, which was unveiled last month.
Rao said, "This does not mean that we would not launch Fabia in India. Learnings from our Rapid project can be replicated for Fabia. However, it will take more than two years."
Puneet Gupta, associate director, IHS Automotive Sales Forecasting, said, "The strategy may work well for Skoda. Honda for example, was also considered as a value premium brand. But the company now has products in the A and B segments."
Meanwhile, the company launched its new Yeti in Mumbai on Wednesday at Rs 18.63 lakh (ex showroom Maharashtra).
The company also said that it is working on revamping its entire dealer network, which will take one year for implementation.
"The complete network will get a make over under Corporate Design Corporate Identity programme, we realised that our facilities became little outdated, so we have come up with a completely new concept, we are in the last phase of finalising of implementation things here in India, and starting next year we will go through a big change in our workshops," said Pawel Szuflak, director sales & marketing, Skoda Auto India.
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