Zac Hollis, director, sales, service and marketing, Skoda Auto India Pvt Ltd spoke to Mint earlier today on the sidelines of the launch of the Kodiaq Scout SUV in Mumbai. He spoke about bringing four more new cars by end 2020, expanding the reach before India 2.0 cars come in; revise Skoda’s aftersales strategy for India, focus on SUVs to fuel future growth, dealer profitability and others. Excerpts from the interview:

Q) What is Skoda’s India strategy in the immediate future summing up over the next 2-3 years?

It is important that we keep the brand alive in the minds of the consumers and similarly we have to give a clear business case to the dealers before the India 2.0 cars come in 2021. So we are launching five more cars including the Kodiaq Scout between now and the time when the India 2.0 cars come in. So four more new cars will come before the end of 2020 to keep the brand alive and make it financially viable for the dealers.

We will more than triple the pan-India dealership count to over 200 by 2025 because we need to increase our reach to be in smaller cities not just only from the sales point of view but also from the service aspect. We have 64 outlets right now.

Q) In the middle of Skoda’s aggressive plans for India, what are your top priorities?

The short term priority is to manage the changeover from BSIV to BSVI emission norms. That has to be done, and this also means that we have to exhaust all BS IV inventory before the deadline. Then we have to launch the BS VI car lineup. Another big priority I am working on is to work on the aftersales and the cost of ownership experience. We are doing a lot of work on that already. We will be doing more on that and new announcements will happen in the next few months. So we are looking to reduce the cost of ownership and improve the aftersales experience for customers. Those are the top two priorities, and then of course we have to get ready for the India 2.0 and maximize our reach to maximize our sales potential.

Q) SUVs have been driving the passenger car sales in India. Will you be focusing on the SUVs to fuel future growth in India?

The sports utility vehicle (SUV) segment is booming across the world and not just in India. People like the high driving position, and they like the robust and safe feel of the SUVs. So we will be launching more SUVs in India in the next two years.

Q) Although you are working to build a business case for your dealers in the mid-term, how are you supporting them during the ongoing slowdown in the domestic market?

It is a difficult environment right now, let’s just be fair. The dealers are working to improve their aftersales business because this is an area which can improve their profitability. As I said, we will bring four new models by next year, and this will also support the dealership business case.

On inventory management, we are operating with a lean plan as long as we are not losing any sales opportunity. We have a pact with the Volkswagen Financial Services, which funds the dealer inventory. I think VW Financial Services is funding nearly all of our dealers for wholesale business.

Q) What will be Skoda’s petrol-diesel mix after 1 April 2020 in India?

I won’t be able to comment on that because I am not clear on that either. We are still working on it. But to answer you, the whole market is moving to petrol and away from diesel anyway. We are seeing a lot of this happening in Europe as well.

The investments made by every manufacturer into making diesel engines adhere with the BS VI emission norms is much more than the petrol engines. The consumers will have to pay for that in the future and this will make a difference. The TSI engines that we have in the Superb and the Octavia models make the case for petrol very good (for Skoda).

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