After seeing good demand for Kushaq and Slavia, Czech car maker Skoda continues to be bullish about the Indian market. Over the last two years, Skoda recorded sales of over 1,00,000 units; while earlier it took the company six years to achieve the same.
The auto maker will be entering the compact SUV segment and will be launching a made and designed in India product in 2025.
Speaking exclusively to CNBC-TV18, Martin Jahn, Member of the Board of Management for Sales & Marketing at Skoda Auto a.s, expressed his satisfaction with the company's progress in India.
Jahn stated, "We are pleased with our developments in India. Kushaq and Slavia have contributed to over 100,000 sales in the last two years, whereas previously, it took us six years to achieve that. We are preparing to introduce our third product, a compact SUV made in India specifically for the Indian market. The sub-4-metre segment is crucial in India, and we are confident that we will achieve 100,000 sales in 2026."
The company aims to double its sales and touchpoints in India. Currently, Skoda exports Slavia and Kushaq, manufactured in Pune, to the Gulf region, North Africa, and other parts. However, for the upcoming compact SUV, the company currently has no plans for exports.
Jahn explained, "Exporting the third product will be challenging as we need to figure out the economics. In India, the sub-4-metre segment is supported by the government, which is not the case in other countries. For exports of our compact SUV, we will have to evaluate the local markets."
Skoda is also set to launch its premium electric car, Enyaq, by the end of 2024 or early 2025. The EV will be introduced to India in a completely built-up (CBU) format.
Jahn emphasised Skoda's plans for its EV journey in India, saying, "Enyaq is extremely successful in Europe. We will bring it to India in CBU format to showcase our technology. We are also exploring ways to enter the volume segment in EVs and are assessing the right car and setup for the Indian market. We need to explore the right car at the right cost."
Regarding further investments and targets in India, Jahn mentioned, "We made a commitment to India by investing in the Pune plant. The upcoming compact SUV will help us utilise the capacity at the Pune plant. For EVs, we are exploring options, and it is too early to talk about investments. We are committed to India, aiming to have a 5% market share by 2030. We will strongly participate in electrification in India."
Addressing reports about VW Group's plans to dilute its stake in the local subsidiary Skoda Auto Volkswagen India (SAVIPL) for electrification, Jahn commented, "I cannot provide any comments on this speculation. The group has a tie-up with M&M for components, which is a different story altogether. We are exploring options to bring EVs to India, and we are evaluating which product would be suitable for the Indian market."
On the India and
European Union free trade agreement, Jahn stated, "India and EU FTA talks are in the early stages of negotiations. We will look for the best ways to bring more products. It is too early to comment on FTA, but we are hopeful that it will benefit us."
Discussing challenges for Skoda Auto in India, Jahn added, "Profitability is a challenge in India due to the highly competitive market. The low price level is always a challenge for foreign car makers in India. However, we are making good progress, and achieving big volumes will help us in utilizing our capacity. Skoda's immediate challenge is to enter new territories. With the launch of the compact SUV, we will expand to tier 3 and 4 cities and need to learn about these customers."
Jahn also highlighted, "Cost and the growth of dealerships are major hurdles as of now. We have to expand the dealer network quickly as we are doubling our sales. We are growing fast in India, and we are quite happy with the start."
While global electric vehicle players like Vinfast and Tesla seek duty cuts from 100% to 15% until they can begin manufacturing, Skoda Auto holds a different perspective. Jahn believes that the Indian government must choose a path to support e-mobility in the country.
He explained, "E-mobility development depends on government policy, just like in any other part of the world. While import is one way, for us, local production will be the main way. India is a big and specific market, and we are figuring out which will be the perfect product. The way we are committed to ICE vehicle production, the same way is good for EVs."
(Edited by : Anand Singha)
