Skoda’s India-specific model, a mid-sized SUV, developed under its €1-billion (₹8,000 crore) ‘India 2.0’ project, is expected to hit the market in 2021.

The Chakan unit (in Pune) is being upgraded and a new R&D facility has been set up there. Technical development of new products will take place there with nearly 95 per cent localisation of components.

The company has maintained that it will assess the possibility of exporting India manufactured vehicles, at a later stage.

Skoda Auto’s parts and components are mostly imported in a completely-knocked down condition for models like Octavia, Kodiaq and Superb. In case of Rapid, there is 65 per cent localisation. The company has the four models in India at the moment. The Rapid is manufactured at the Pune plant, while the Octavia, Superb and Kodiaq models are produced at Aurangabad. In line with its India investments, Skoda Auto is looking at nearly 138 dealerships by 2023, up from the existing 63.

“By 2021 we should see the first car from Skoda under its India 2.0 project. However, there are some more models lined up for launch in 2020 also,” Zac Hollis, Director – Sales, Service and Marketing, Skoda Auto India Pvt Ltd, told BusinessLine .

According to Hollis, Skoda Auto is “keenly watching the space” when it comes to electric vehicles. It is waiting for “clear plans on infrastructure” that include charging facilities, before entering the category.

Growth expectations

While Skoda India is expected to launch new models next year, not much growth is expected across the auto-sector in India. Sales are expected to pick up from 2021 onwards. “Compared to 2019, we anticipate growth in the auto industry to be flat in 2020. But, growth is expected from 2021 onwards,” he said.

Skoda Auto sold 17,000 cars in 2018 and is expected to close 2019 with 15,000 units (The company follows a calendar year). Mid-and small-sized SUVs have seen an increase in demand. Overall lesser sales are attributed to economic slowdown and weak consumer sentiments.

According to Hollis, there needs to be “strong consumer sentiment” for car sales to pick up. And the government of the day has to drive-up consumer sentiments. Another factor that will help drive sales is new launches.

“If I look at competition, some of the new models that have been launched this year have done well compared to older models,” he pointed out.

In 2019, Skoda has not launched any new model. Rather it has been upgrading existing ones with new features or having limited (special) editions.

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