NEW DELHI, Jan 28
Czech carmaker Skoda is looking to turn profitable in India this year as it expects sales to double with its foraying into the high volume sub-compact SUV segment with its new offering Kylaq, according to a top company executive.
Bullish on its growth aspects, the automaker expects the Indian market to break into its top five markets globally with enhanced sales volume growth.
In an interaction with PTI, Skoda Auto Board Member for Sales and Marketing Martin Jahn said the company plans to enhance its model lineup, including electric cars, and bolster localisation to ramp up the scale of operations in India.
He said the company also plans to utilise India to export to various markets globally.
“We want to more than double our sales this year. We believe that India will make it to the top five of the global markets of Skoda. We also plan to use India to export more to the Middle East, North Africa, to Australia,” Jahn said.
Further, he said Skoda has been extremely successful in Europe last year and now also wants to grow in the Indian market.
“Last year, we grew to number four (in Europe) and significantly increased our market share, it’s our core market, so we are happy about it, but we need to diversify, and India is the most important market outside of Europe,” Jahn said.
When asked about new product launches in the Indian market, he noted that the company plans to establish its existing product lineup in the country before going in for further expansion.
Besides Kylaq, Kushaq and Slavia, the company plans to drive in premium sedan Superb, new version of Kodiaq SUV and an electric SUV in the country, Jahn said.
“We have to establish these models in the market and achieve volumes…so for the immediate future, we have enough, and then we will see how the market develops,” he said.
“We also have to achieve a basic level of profitability,” he said, adding, “That’s the biggest challenge, I think, for European or for Western manufacturers, to achieve some profitability, and therefore for that we need scale. So we first need to maximise the volumes of these existing models before thinking about bringing another model.”
Jahn said the company would aim to turn profitable this year and for that, it would also look at enhanced localisation and reduction in cost structures.
“We have to run efficiency programmes in every country, even in Europe, where we are quite lean, we run efficiency programmes. And in India, we also have to run efficiency programmes,” he said.
So enhanced volumes, localisation and efficiency programmes are the most important factors to turn profitable in the country, Jahn said.
Additionally, he said the company is improving in every aspect, from reducing service costs to introducing new products which are affordable, to grow in the country.
Jahn noted the automaker has already received 20,000 bookings for Kylaq.
Skoda sold 36,000 units in India last year. In 2023, it sold 49,000 units.
Elaborating on exports, he said the company is starting CKD (complete knock-down) production in Vietnam based on Indian products.
“So we will be exporting CKD kits. So India is just the most important focus outside of Europe, for local production, for exports, and for CKD production. So it is very important for us that the Indian economy further flourishes. The market grows and we have good conditions here for expanding our business,” Jahn said.
On EVs, he noted that the regulations are expected to be finalised in the next couple of months and accordingly the company would also decide on its policy.
“Government regulations will define which car we will bring this year and in what volumes and when we will be producing in India,” Jahn stated.
Everywhere in the world, the EV market is driven by regulations, he noted.
Jahn stated that in Europe, there is a big slowdown in demand for electric cars.
“We also do not expect big growth of electric cars. So it’s about customer sentiment..I wouldn’t dare to give any advice to the Indian government, just the policy has to be in line with the reality,” he stated.
“Every country has to find what is the best for their infrastructure, for the natural resources, for the customer service, sentiment, for the profitability,” he said.
Jahn added that Skoda is looking at launching hybrid models in India.
“And again, it depends on the regulation. At the moment, there is no advantage for hybrids,” he said.
The company’s hybrid models come with very high technological standards and therefore they are also quite expensive, he added.
“So to bring them to India would require quite strong support (in terms of taxation) for plug-in hybrids,” Jahn said.
