Skoda India wants to bring down costs of vehicles through greater localisation

Skoda Auto India, an auto maker which has been in the country since more than a decade, is looking to bring down the development cost of cars and make more localised products in order to increase domestic volumes. The company has been unable to achieve large volumes in India due to lack of new products, premium pricing and brand perception issue.

Data by Society of Indian Automobile Manufacturers (SIAM) shows that Skoda Auto India sold just 5,692 units in April-August 2014, a decline of 32.78 per cent as compared to the same period last year. The Czech auto maker is now realigning strategies in a bid to cater to a larger customer base here.

According to the plan, Skoda Auto India is in the process of bringing down manufacturing costs of its sedan Rapid, which is expected to bring better margins through highly competitive pricing for customers. If the strategy works, it will be replicated for Skoda's future products as well.

Speaking about the new strategy, Sudhir Rao, MD at Skoda Auto India said, "We are working on project Rapid, which is about bringing the costs down. However, we will not compromise on the quality and content on our cars. Currently, our development costs are very high and everything is developed in Europe. With this, the pricing of Rapid may also come down," said a company official.

Rao further added, " Learnings from our Rapid project can be replicated for Fabia. However, it will take more than two years."

Echoing similar sentiments, Pawel Szuflak, Director of Sales & Marketing, Skoda Auto India, said, "The complete network will get a make over under Corporate Design Corporate Identity programme, we realised that our facilities became little outdated, so we have come up with a completely new concept, we are in the last phase of finalising of implementation things here in India, and starting next year we will go through a big change in our workshops."