German carmaker Skoda has been struggling to grow its sales in India. Despite launching the cars at a lower price point compared to their price list, they have not received as much reception as expected in India.
Skoda Superb and Kodiaq cars are sold at very high prices. While the Slavia and Kushak are priced lower than Skoda’s other two cars, customers complain that they don’t offer value-for-money features.
So Skoda is planning to take new initiatives to increase their sales in India. Recently, the company’s CEO Klaus Zellmer said that they are planning to join hands with an Indian company.
The mindset of Indians is that they want low cost and complete facilities. Therefore, Skoda believes that by joining hands with an Indian company, they can make cars of the type suitable for us. Also, many parts for Skoda cars are imported from foreign countries. Skoda is constantly trying to reduce it.
Skoda plans to launch a new sub-4 meter compact SUV model in March next year. The company plans to launch this car to compete with Tata Nexon and Mahindra XUV 3XO. The above mentioned cars are being sold at a starting price of less than Rs.8 lakhs. Skoda has never launched a car in India under Rs 10 lakh.
So the company is taking necessary steps to make the price reduction possible. Mainly, the company plans to manufacture the parts required for their new car locally and use domestic products. Skoda is adamant that 75% of the components for the new car should be indigenous. This will reduce the cost of their new car.
Skoda plans to manufacture this new compact SUV model at its Pune plant along with the Slavia and Kushak models. The plant has an annual production capacity of 2.7 lakh cars (including Volkswagen cars). Skoda plans to produce 90,000 cars a year for domestic and export.
As mentioned above, if Skoda manufactures the new car with 75% indigenous components, Indian customers can expect a cheaper compact SUV model.
