Foreign cos upbeat to scale up biz in India: India most important market for Skoda: CEO

Prague: Czech car maker Skoda is lining up new models, expanding sales network and also looking to forge partnerships to scale up business in India, the most important market for the brand outside Europe, according to global CEO Klaus Zellmer. The company, which currently sells models like Kushaq and Slavia in the country, aims to drive in an all-new compact SUV early next year hoping to almost double its sales volume in the market. Skoda Auto India sold around 49,000 units last year. India is the world’s third-largest passenger vehicle market with annual dispatches surging to 42 lakh units in FY24.

The automaker, a part of the Volkswagen Group, is also looking to introduce electric vehicles in the country. In an interaction here, Skoda Auto global CEO Klaus Zellmer said the automaker is willing to learn and be totally customer-centric as it considers India as the most important market for the brand after Europe. “Outside Europe, our most important adventure is India because this is the place to be going forward,” he stated. India is crucial to the growth strategy of Skoda Auto as the automaker brings its broadest and most up to date product portfolio ever to customers, Zellmer said. The country also gives the brand a competitive advantage in its international expansion strategy, he added. “There is so much happening’¦ we believe in India’s growth potential, and of course we will be a part of that,” he stated.

Zellmer noted that with the brand moving out from Russia and not doing so well in China, it expects to do well in India going forward. “In a business, it is always not wise to stand on one leg. In our case, this is Europe. If it gets a little shaky, you want to stand on two legs, and the second leg for us is India,” he said. Zellmer further said: “India is not only the most attractive region for us outside Europe, it is also the most competitive environment.” There are new competitors, new entrants with new cars, so it really is a predatory environment, he noted. Zellmer said the automaker has learnt its lessons and is now looking at enhanced localisation in India to be more competitive in terms of pricing.

“Often we build cars according to our own expectations, and they tend to be over-engineered. And, for that engineering, it always comes at a price tag and of course it is something that weakens our competitive position. So we need to learn, we need to be aware of the sweet spot,” he stated. In 2018, Volkswagen (VW) announced a major rejig in plans for the Indian operations giving group firm Skoda the responsibility for the market. When asked if the company is also looking to tie up with an automotive manufacturer in India, he stated that one option is to “stand alone” and the other option is to find a partner. “I very much believe in a scenario where we find a partner to be more in tune with society, with customers, with the industry, with all the prerequisites in order to be successful,” Zellmer noted. “We’re currently discussing with various (prospective) partners,” he added. He noted that the intention is that the partnership should work out well for the entities, with both bringing something to the table.