Volkswagen presses the accelerator for Skoda with new models, more dealers

Topics Volkswagen | SkodaAuto

Zac Hollis, director (sales, service and marketing), Skoda Auto, at the launch of the Kodiaq Scout last month
After a series of flip-flops and hits and misses for over a decade, Skoda Auto, the Czech auto brand that is part of the Volkswagen (VW) Group, is stepping on the gas in India. From rebranding the dealerships and undertaking a massive expansion of its sales network — from the current 63 to over 200 by 2025 — to plugging the gaps in after-sales and service that have been the brand’s biggest pain point in India and reducing the cost of ownership, the brand is reworking the offering for the Indian market.

The company has announced the launch of three new models that will start rolling out from mid-2021. Zac Hollis, director, sales, service and marketing at Skoda Auto, says, “My job in the next few years is to get the market ready for these new cars.”

New models and a new brand interface are part of the overall revamp strategy at Skoda Auto which is leading the charge for the group in India. The company is also working on building greater awareness and mass appeal for the brand as it drives into smaller towns and cities for the first time in its decade-long existence in the country. “Reducing the cost of ownership tops the agenda. The company has already reduced the cost of parts by 13 per cent,” says Hollis. This has been achieved by rationalising sourcing and passing on the benefits to customers. Hollis says the firm is working at paring costs further from January 2020.  

This is not the first time that VW-Skoda is burning up the road in India. This time around, however, the resolve seems much firmer and comes with the strong backing of the parent company. Also, with the fortunes of the parent closely tied to the brand's performance in India, there is a lot more riding on it. India is among the top 10 markets for Skoda.

In the past, VW was the brand in focus as it had a stronger legacy in the country. However, in July 2018, the group put Skoda in the driving seat, as part of its India 2.0 project. Now Skoda takes the lead in marketing, product development and engineering.    

Analysts believe that the change of gear in the country is well-timed because Skoda enjoys better recall. Associated with nimble-footedness and an ability to take quick decisions, it is finally getting all the attention it deserved, says Avik Chattopadhyay, co-founder at brand consulting firm, Expereal. “I am optimistic about its future in India. VW Group has finally adopted a very pragmatic approach,” says Chattopadhyay. 

Skoda’s positioning in the Indian market was "serendipitous" say marketing experts. It was a mass European brand that had earned itself the moniker of a “poor man’s BMW”. Skoda did not set out to be a premium brand but was perceived to be one by virtue of its European origin. The edge was lost when the VW brand was positioned above Skoda soon after its launch in the country. The move backfired as there was hardly any 
differentiation in their positioning. As a result, both brands suffered. 

The new pecking order will help restore order and give the brand a better chance at carving out a bigger chunk of the market, believes Rohit Kumar, lead, automotive practice at Hansa Research Group. “The market is split wide open unlike a couple of decades earlier when it was Maruti Suzuki versus the rest. Finally, Indian customers are opening up to other brands,” says Kumar. 

Besides working on its after-sales and service, Skoda is reworking its brand engagement strategies as well. Last month, it launched ‘Single Wicket’ a pan-India programme for aspiring cricketers. It is talent search programme with which Skoda aims to reach a wider segment of customers, said Hollis. 

The company has also launched a test drive challenge: Under this potential buyers test drive a Skoda. If they still choose a rival brand, the fuel tank of the new car is topped up by the Skoda dealer. “This shows how confident we are of the driving experience our brand offers. It also helps us increase the number of test drives,” said Hollis.

The jury is out on whether VW’s new-found confidence in brand Skoda will pay off. But the action on the road has piqued the interest of petrolheads and that is a big change from the pall of indifference that had engulfed the brand. 



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