Active Stocks
Tue Apr 16 2024 15:59:30
  1. Tata Steel share price
  2. 160.05 -0.53%
  1. Infosys share price
  2. 1,414.75 -3.65%
  1. NTPC share price
  2. 359.40 -0.54%
  1. State Bank Of India share price
  2. 751.90 -0.65%
  1. HDFC Bank share price
  2. 1,509.40 0.97%
Business News/ Companies / News/  Skoda bets on affordable compact SUVs to double India sales by 2026
BackBack

Skoda bets on affordable compact SUVs to double India sales by 2026

Skoda Auto hopes to ship out as many as 100,000 cars in 2026, more than twice the number of vehicles it sold in 2023

India is the most promising growth market for the years to come for Skoda as it sets out to build a new international foundation, said Skoda Auto CEO Klaus Zellmer. REUTERS/David W Cerny/File Photo (REUTERS)Premium
India is the most promising growth market for the years to come for Skoda as it sets out to build a new international foundation, said Skoda Auto CEO Klaus Zellmer. REUTERS/David W Cerny/File Photo (REUTERS)

NEW DELHI : Skoda Auto is looking to double its sales in India by 2026 with the launch of its affordably priced compact SUV next year. 

As part of its broader plan for the country, the Czech automaker hopes to ship out as many as 100,000 cars in 2026, more than twice the number of vehicles it sold in 2023, a top company official said on Tuesday.

India's compact SUV market is highly concentrated, with six large brands accounting for 90% of cars sold in the country. This has made it difficult for European, American and Japanese brands to garner scale in the country.

Despite the challenges, India is among Skoda Auto's top five global markets and the third-largest passenger vehicle market in the world, making it a key contributor to the carmaker's global growth, according to CEO Kalus Zellmer.

Skoda sold 48,755 passenger vehicles in 2023, down from more than 53,000 vehicles sold in 2022 due to supply chain issues.

Under the Skoda Auto Volkswagen Group's €1 billion India 2.0 strategy, the Skoda brand launched two models - Kushaq and Slavia on the group's MQB A0 IN platform.

“Europe is important as a core market but our strategic focus is on growing a new international foundation so that we can stand on two strong legs and India is a key contributor to our global growth and the most promising growth market for the years to come," Zellmer said in a virtual address to unveil the brand's growth roadmap in India. "Strengthening our India operations also strengthens our wider internationalization potential."

"We've just fixed our future investment strategy in terms of product enhancements for the existing range and also adding new products on both ICE (internal combustion engine) and battery electric options. We have a solid plan to grow the Skoda brand in India and are targeting a market share of around 5% by 2030", he added.

Skoda Auto accounted for 1.19% of India's over 4-million unit passenger vehicle market in 2023, and 1.4% in 2022, according to auto intelligence firm Jato Dynamics.

Industry experts say its 5% market share target by 2030 is modest but realistic, considering the competitive SUV segment, which is dominated by a handful of highly successful OEMs including Maruti Suzuki, Tata Motors, Hyundai and Kia.

Skoda's newly appointed India brand director Petr Janeba, however, expects only a modest growth in 2024, even as its brand new product comes in 2025.

“We have already identified some potential in terms of what we can do better in 2023. Our target is just to be on a positive note in 2024. We have been slightly worse (compared to 2022) in 2023, so our target now in 2024 is to be slightly better again," he told Mint.

“We are awaiting the new member of the family which will double our volumes from day one. This is a car which has no substitution within the brand and will give us an additional segment of customers to capture for Skoda."

In 2023, Skoda saw a 5.2% share in the mid-sized SUV market with its model Kushaq, and 22% share in the mid-sedan market with Slavia.

Janeba said that electrification is the second pillar of Skoda's growth plan in India, and though there is currently no business case for a sub-four meter EV in India (a segment where Tata Motors currently dominates), it will focus on bringing its Enyaq EV to the country sometime this year, as well as a large 7-seater e-SUV in 2026.

“The government in India would like to have a very ambitious target that is 30% EV penetration by 2030 - but some policies still need to come to support it. There's not much clarity for other manufacturers as well," Janeba said.

However, the company is committed to bringing its four-battery electric vehicles to India, and a specific product for local manufacturing in Pune. “When we have clarity about regulations, we will finalize our business case calculations. So our preferred option is to expand into EVs, but at the same time the most important growth potential for the brand in next two-three years will be the compact SUV product. It will be an IC-engine product only for now," Janeba added.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

ABOUT THE AUTHOR
Alisha Sachdev
Alisha Sachdev reports on the auto and mobility sector, with a special focus on emerging clean mobility technologies.
Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 27 Feb 2024, 08:29 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App