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Last Updated : Oct 09, 2019 12:44 PM IST | Source: Moneycontrol.com

Skoda open to re-entering small car segment using new Volkswagen platform

Depending on the success of the new platform and consumer acceptability of these new models, both companies will take a call if the same platform should be used for developing a hatchback

Swaraj Baggonkar @swarajsb
 
 
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The newly formed Skoda-Volkswagen entity in India could look at launching a hatchback model depending on market conditions and success of new models that it is presently developing.

Skoda Auto Volkswagen India, the new entity, is spending Rs 8,000 crore on product development and manufacturing of two new mid-size SUVs and a new mid-size sedan, which will be launched by 2021.

The entity, which will be headquartered in Pune, was formed after the merger of Volkswagen's three entities in India -- Volkswagen India Pvt (VWIPL), Volkswagen Group Sales India Pvt (NSC) and ŠKODA AUTO India Pvt.

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The merger will help in efficient use of the existing synergies in this important growth market.

The companies are tapping into a common platform called MQBAO IN for churning out these initial bunch of models. Depending on the success of the new platform and consumer acceptability of these new models, both companies will take a call if the same platform should be used for developing a hatchback (compact car).

Speaking to Moneycontrol, Zac Hollis, Director – Sales, Marketing and Service, Skoda Auto India, said, “We can launch the car at the right price if there is a business case for us. The first two cars will be mid-size SUVs and there will be a mid-size notchback. We will see what other body style can be made out of the MQBAO IN platform. It could be a hatchback but that business case still needs to be worked out.”

Skoda exited the hatchback segment in 2012-13 with the phase out of Fabia. The model served as Skoda’s response to Maruti Suzuki’s runaway hit Swift. As most of Fabia’s parts were imported, it exposed itself to forex fluctuations. Mounting competition too forced Skoda to withdraw the Fabia from the market.

At present, the two companies have only the Volkswagen Polo on sale in India, which qualifies as a hatchback. The Polo has been on sale since 2009.

Maruti Suzuki continues to be the largest manufacturer of hatchbacks in India, with the widest offering. As per data supplied by the Society of Indian Automobile Manufacturers (SIAM), hatchbacks commanded a 45 percent share of the domestic market in the April to August period.

Despite operating in India for nearly two decades, Skoda has a very limited product line-up in the country and commands a 0.5 percent share in the domestic market. It sells four main models: Rapid, Octavia, Superb and Kodiaq.

Since the company is expanding its product offering, it is tripling its dealerships too. By 2025, Skoda aims to have 200 operational dealerships from just 64 at present.

“We will have a much better business case for dealers in Tier II and Tier III cities, with an expanded product line up. We will expand into smaller cities as we are well represented in bigger cities,” Hollis added.

For the time being, both Skoda and Volkswagen are focusing on the SUV segment, which has consecutively posted robust growth at the cost of sedans and other segments.

“The SUV segment is growing not just in India but across the world. Customers like its high driving position and robust size. We want to give customers what they ask for and so will launch more SUVs in India,” he added.

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First Published on Oct 9, 2019 12:44 pm
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