Almost two years after slashing the price of the Fabia hatchback by over Rs 1 lakh, Skoda is again looking to reduce prices for its entry model in the country. Combined with an increased sales network, this it hopes will increase Fabia sales by about five times by 2017.

With sister company Volkswagen now focussing on the premium-end, Skoda is now looking to cement its position in the value-focussed mass car segment currently dominated by Maruti Suzuki, Hyundai and Tata Motors.

The repositioning for the next generation of the Fabia will be done through component localisation, which will also bring down the cost of ownership. This will be aided by parent company Volkswagen’s plans to build a Group engine plant in India from next year (start operations in 2014).

Sudhir Rao, Managing Director, Skoda Auto India, said this is a key element of Skoda’s target to grow over “four-fold” to 1.75 lakh unit annual sales by 2017. This is an ambitious call given that the brand sold 34,089 units in the 2011-12 fiscal and aims to sell 40,000 units in 2012 calendar.

“From 1.5 per cent, we are looking at a four per cent market share by 2015. We expect the Fabia to account for 75,000 to one lakh sales by that time. It is important for us to have a strong volume contender in the mass hatch segment,” Rao said.

Skoda will also be aided by the success of the Rapid entry sedan, which though based on Volkswagen’s Vento model, has already exceeded the latter’s sales. For volume growth, the ‘Citigo’ compact car could also be launched in about two years.

The first in the Volkswagen Group of eight car brands to enter India, Skoda’s decade-long presence has faced several challenges in terms of expensive spare parts and after-sales service.

In April-August, the Fabia sold just about 2,000 units compared with market leader Maruti Swift’s sales of about 16,000 units every month. The price cut of October 2010 did push Fabia sales for a few months, but it fizzled out soon after.

roudra.b@thehindu.co.in

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