Skoda awaits a ride with Tata Motors

Skoda, the Czech car maker and part of the Volkswagen group, is anticipating a push in its performance from 2019 when new products developed jointly with Tata Motors roll out. These products are targeted at emerging markets, including India.

“These will be products with the Skoda brand character but developed with Asian/Indian mindset in terms of ways of development, choice of materials and productivity levels and other strategies. The combination of our learning combined with a partner (Tata Motors) who knows how to operate in India will make us extremely well placed,” Sudhir Rao, chairman and managing director at Skoda Auto India.

Rao said the management and organisational culture is an aid to business performance and Tata Motors has learnt a lot from the JLR experience. “So, it is a great partner,” he added. The structure of the association post the March deal is being put in place now.

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.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel