Photo: LinkedIn/ @skoda-auto
5 min read Last Updated: June 30, 2024 | 05:21 PM IST
Czech car maker Skoda is launching new models, expanding its sales network and looking at partnerships to expand in India, the brand’s most important market outside Europe, said Global CEO Klaus Zellmer.
The company, which currently sells models such as the Kushaq and Slavia in the country, aims to nearly double its sales in the market with the launch of a new compact SUV early next year.
Skoda Auto India sold about 49,000 units last year in India, the world’s third-largest passenger vehicle market, with annual deliveries surging to 420,000 units in fiscal 2024.
The automaker, which is part of the Volkswagen Group, is also considering introducing electric vehicles in the country.
During an interaction here, Skoda Auto Global CEO Klaus Zellmer said he considers India to be the most important market for the company after Europe and that the company is open to learning and will remain completely customer-centric.
“Outside of Europe, India is our most important adventure because that’s where we need to go,” he said.
Zellmer said India is crucial to Skoda Auto’s growth strategy and the company is offering customers its widest and most modern product portfolio ever.
He added that the country also gives the brand a competitive advantage in its international expansion strategy.
“A lot is happening. We believe in India’s growth potential and of course we will be part of it,” he said.
Zellmer said the brand has exited Russia and has had less success in China, but he expects it to be successful in India.
“In business, it is never wise to stand on one foot. In our case, it is Europe. When things get a little unstable, you need to stand on both feet and the other foot for us is India,” he said.
“India is not only our most attractive region outside Europe, it also has the most competitive environment,” Zellmer added.
There are new competitors, new entrants with new vehicles, so it’s really a predatory environment, he noted.
Zellmer said automakers have learned lessons and are considering boosting local production in India to make their cars more price competitive.
“We often build cars to our own expectations and we tend to over-engineer them, and that design always comes at a price, which of course makes us less competitive. So we need to learn and we need to recognize the sweet spot,” he said.
Volkswagen (VW) announced major changes to its plans for its India operations in 2018, handing responsibility for the market to group subsidiary Skoda.
Asked whether the company was also considering partnering with an Indian automaker, he said “going it alone” was one option and another was to find a partner.
“I strongly believe in a scenario where we find a partner that is more in tune with society, with customers, with the industry and all the prerequisites for success,” Zellmer said.
“We are currently in discussions with various (prospective) partners,” he added.
He said the aim is for each company to bring something to the table and for the partnership to work well for both.
Asked for details, Zellmer confirmed that this would be an equity partnership.
However, he did not elaborate on which groups the automakers are in talks with to form a partnership.
The Volkswagen Group already has a partnership with the Mahindra Group for electric vehicle components.
Zellmer said the group will continue to invest in India even if it continues to operate independently. He said the carmaker is gearing up to introduce a compact SUV in the country and is currently preparing to strengthen its sales network in the country.
“Right now we have 250 customer touch points. By the end of the year, we are looking to increase that to around 300 to ensure proper coverage and attract as many customers as possible to the vehicle,” Zellmer said.
With this expansion, the brand hopes to increase its presence in smaller towns and cities.
Zellmer said the brand continues to consider other models for the market, including the all-electric Enyaq.
“With EV penetration in the country expected to grow by 15-30 percent, our global strategy is to offer customers the best of the world through a choice of electric or highly efficient internal combustion powertrains,” he added.
The company also aims to make India an export hub.
“Our development and manufacturing base in Pune gives us a foothold into ASEAN and the Middle East. The capabilities we have to build in India for India and the associated export capabilities are helping us realize new international sales outside Europe,” Zellmer said.
(Only the headline and photo of this report may have been modified by Business Standard staff. The rest of the content is auto-generated from a syndicated feed.)
First Published: June 30, 2024 | 5:21 PM IST
