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In 2021, Skoda will launch a midsized SUV based on the VISION IN concept unveiled at the 2020 Auto Expo. Reuters
In 2021, Skoda will launch a midsized SUV based on the VISION IN concept unveiled at the 2020 Auto Expo. Reuters

Skoda, VW bet on India 2.0 project to change fortunes

  • Combined entity plans to triple market share to 5% in five years with SUV onslaught

Skoda Auto Volkswagen India Pvt. Ltd is targeting a sharp increase in sales of Skoda and Volkswagen brands of passenger vehicles starting next year, fuelled by the launch of new models, said a senior company executive.

The model offensive would be spearheaded by a mid-sized sport-utility vehicle (SUV) that would challenge Korean rivals Hyundai Motor India’s Creta and Kia Motors’ Seltos SUVs among others in this fast-growing segment. Skoda’s still-to-be-named SUV would be based on a platform that would also spawn Volkswagen’s Taigun SUV, also set for launch in 2021.

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“We are preparing the organization to sell 100,000 Skoda cars a year by 2025 from 15,000 cars a year currently. We will launch the all-new midsize SUV by mid-2021, along with new Octavia and BS-VI compliant Kodiaq SUV next year," Zac Hollis, director, sales, service and marketing for Skoda Auto India, said in an interview.

Hollis said the aim is to sell 30,000 Skoda vehicles in FY22, up from 14,444 vehicles in FY20.

Skoda’s plans are part of Volkswagen AG’s India 2.0 project, which entails fast-tracking its business through new launches, retooling assembly lines and expanding capacity at its plant in Chakan near Pune.

The German carmaker will also expand the sales and service network as Skoda and VW brands are reworking strategies to boost dealer profitability, drive brand awareness and add first-time buyers through pre-owned ventures.

Hollis said Skoda will grow its dealer network from 65 at the start of 2020 to 130 by June 2021 and ramp up service workshops from 65 to 110 in the same period.

The VW brand, which has a network of 150 sales, 116 service and 105 Das WeltAuto pre-owned car outlets across 105 cities, plans to ramp up to 160 sales touchpoints across 128 cities.

The VW Group will launch four new cars based on its heavily localized sub-compact MQB-A0-IN platform over 2021-22.

“2021 will be the year of Volkswagen. We announced a plan to launch four SUVs for the Indian market in 2 years at the Auto Expo 2020. As part of that, we have already launched T-Roc, which was sold out within 2 months of launch, and Tiguan Allspace this year. Next year, we will be launching our most anticipated product under India 2.0 project—VW Taigun along with one more SUV," said Ashish Gupta, brand head, Volkswagen Passenger Cars India.

Under the India 2.0 project, Volkswagen merged three of its Indian units—Volkswagen India Pvt. Ltd, Volkswagen Group Sales India Pvt. Ltd, and Skoda Auto India Pvt. Ltd—last year to have better synergies, enable quick decision-making at the senior management level and enhance its consolidated market share in the mid-term.

VW and Skoda brands together hold only 1.5% of India’s passenger car market, as per industry data. Having commissioned an investment of €1 billion under the India 2.0 project two years ago, the VW Group plans to more than triple its market share to 5% by 2025.

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