After finding losses in the volumes segment with the Fabia hatchback, Skoda has re-iterated itself to be a premium player once again, capitalizing on the absence of Honda which has pulled the plug off its premium sedans like the Civic and Accord in the country. While the Japanese car maker is concentrating on the sub-10 lakh volumes segment where the company tasted massive success, the Czech car maker has diverted its attention and resources towards the Octavia and Superb to achieve sustainable profits.
“Skoda will remain an aspirational brand and never be a budget brand” the company stated; which is ironic since the car maker is a budget brand positioned below Volkswagen in its home market. However in terms of its Indian operations, the company is clear that it will not move down the ladder just to boost volumes. Skoda is optimistic that with time people will come over the price sensitivity and appreciate the build quality, driveability and safety of its vehicles. Operating in a segment with limited volumes also means maintaining appreciable after sales service, which clearly has not been a strong point for the company.
Nonetheless, Skoda is working on improving the after sales and service of its vehicles, with customer issues and satisfaction becoming a strong priority for the company. It is also working on employing more personnel on field to tackle customer related problems. Moreover, the automaker now has Indian personnel operating the domestic arm of the company, who are also taking the strategic decisions for the company. Skoda is also working on lower overhead costs to improve margins and reduce losses.
With the last fiscal registering losses for the company to the tune of Rs. 82.25 crores, Skoda has now restructured its concentration on its existing line-up of vehicles which include the Rapid, Octavia, Superb and Yeti SUV. The launch of the next generation Fabia and a new global SUV are also being looked upon, but will not materialize before 2016. Skoda will also be engineering a product for the first time in India, which is the Rapid facelift, set for a launch later this year.