Skoda Auto India Pvt. Ltd. will not manufacture any vehicle in India apart from its mid-sized sedan Rapid, as it is not a financially viable for the company given its sales volume.
The automaker locally manufactures only the Rapid at its parent Volkswagen India's plant in Pune, Maharashtra, while its other models are completely knocked-down (CKD) imports.
“We follow the parts and component business modeI”, Ashutosh Dixit, director-sales, service, and marketing of the automaker, told BloombergQuint on Thursday on the sidelines of the launch Skoda's new model of Octavia. “I think given the volume situation, that is the most effective business model”, he added.
Future Launches
Skoda India has plans to launch three other products during 2017, including the premium sport utility vehicle Kodiaq, all of which would be CKD imports, said Dixit.
The company expects sales to grow 30 percent year-on-year in 2017, with a target of 45 percent growth in the second half of the calendar year.
The automaker launched a refurbished version of the executive sedan Octavia, priced at Rs 15,49,405 ex-showroom, which would also be imported as a CKD unit, the company said. The car has been launched with its existing line of two petrol engines and one diesel engine
In terms of pricing, the refurbished model is cheaper than the old Octavia by Rs 7,000 to Rs 10,000. The Octavia competes with parent Volkswagen's Jetta, and market leader Toyota Kirloskar's Corolla models in the executive sedan space. General Motors India's Cruze, which is also competition, will be discontinued from January when the automaker shuts down sales operations in the country.
The new Octavia is Skoda Auto's first launch in the country since the rollout of the new Goods and Services Tax.
The automaker admitted that the initial phase of implementation will have difficulties. “Of course there are teething issues. We are still in the early phase of GST implementation and maybe will see some difficulties”, Dixit said, adding that overall the new indirect tax regime is progressive step for India.
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