The Hindu Business Line : Skoda revives small car project for India

New Delhi, Jan. 9 Skoda Auto is working on developing a small car for the Indian market, and expects to showcase it at the next Auto Expo at Delhi, Mr Reinhard Jung, Chairman of the Board, Skoda Auto, has said.

Speaking to Business Line on the sidelines of the ongoing 9th Auto Expo Delhi 2008, where Skoda Auto India Ltd unveiled the Fabia, Mr Reinhard said, “Growth in India is seen in the lower price segment. We are of the opinion that we should think of offering a small car.” He declined to comment further on the proposed vehicle, stating, “You will hear something in a year’s time.”

Skoda Auto India member of the board, Mr Thomas Kuhl, later said the small car is expected to be priced below the base model of Fabia which is below Rs 5 lakh. “It is certainly part of our mid-term plan,” he said. Skoda does not have any models below Fabia in Europe and hence the new small car will be built for the Indian market, Mr Kuhl said.

Skoda was earlier planning to build a car for the Asian market but the project was abandoned. Now it has revived the plans but Mr Kuhl said the car will not compete with any of the low end models in India in terms of pricing.

“We want to be a major player in the lifestyle category. Our car will be priced above the low end models but at the same time it will be competitively priced,” he said.

The Czech car maker has recently completed the process of augmenting the production capacity at its Aurangabad plant from the existing 15,000 units to 30,000 units per annum. The total investment in this plant where Skoda models like the Laura, Superb, Octavia and the newly launched Fabia are assembled is €100 million, Mr Reinhard revealed. He added that an additional amount of €70 million would be invested at Volkswagen’s new plant at Chakan near Pune to facilitate manufacture of the Fabia here as well.

Fabia will come in eight variants in both petrol as well as diesel segments and are priced between Rs 4.99 lakh and Rs 7.68 lakh. The price difference between the diesel variant and the petrol variant is about Rs 1 lakh.

Elaborating on the Fabia, Mr Reinhard said that if the new car garnered the same market share in the relevant segment as the current Skoda vehicles (23 per cent), the company expected it to be 50 per cent of total volume in India in a year’s time.

It was also looking at increasing the local content, and expected it to reach 50 per cent in two years from now. Skoda has sold about 50,000 cars since it launched its first car in 2001 but in 2008 alone it expects to sell about 30,000 cars.

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