In March, Tata Motors announced a partnership with German auto major Volkswagen under which it will work with Skoda to jointly develop vehicles, targeted at emerging markets, including India. The duo will also look at joint development of components.
Skoda, which sells little over thousand passenger vehicles a month in India, had seen volumes decline in recent few years. It has started showing growth since January. “Last year was the trough of our performance. In the January-March period of 2017 we grew at 7-8 per cent. We will grow at minimum 25 per cent this calendar year,” said Rao.
Skoda, which currently has 65 sales-service outlets, is also upgrading the dealerships in line with its global identity. Rao said the company is moving towards profitability and has managed to improve performance year after year. “We have streamlined operations, reduced headcount in recent years, rationalised product portfolio, changed marketing strategy by taking away discounts, and improved infrastructure at dealerships”.
The company believes there is a shift in consumer demand and given its positioning of ‘value luxury’, more buyers could opt for Skoda in future. “Technology, space, reliability and safety have remained our basis attributes and the buyers have appreciated these,” said Rao, whose company has sold about 250,000 cars in India since it started operations in November 2001.