Volkswagen group company Skoka Auto to reposition itself as premium brand

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May 26, 2014: Skoda Auto a constituent of the Volkswagen group company which has been grappling with positioning problems in India is looking forward for a major overhaul in its strategy and to reposition itself as a premium brand. The company which was earlier running behind volumes by launching models like Fabia in the small car segment is now looking forward to pitch itself as a premium brand. The Czech carmaker has shifted focus to its models like Octavia and Superb and looking forward to achieve leadership position in the premium end of the mid size sedan market. Skoda had recently dropped its loss making small car Fabia from its portfolio.

Managing Director of Skoda India, Sudhir Rao was quoted as saying to Economic Times that “While the Indian market continues to be price-sensitive, but with time, we are sure, people will value good build quality, drivability and safety.” While build quality has been a strong point for Skoda in India, poor after-sales service has been its biggest bugbear. The company wants to change that image. “We are trying to change the perception that Skoda cars are expensive to own, maintain and service.” He further added that Skoda will never be positioned as a budget brand and it will remain an aspirational brand.

Skoda would be looking to position itself and occupy the space which was earlier occupied by models like Civic and Accord premium of Honda Motor. Hyundai also had Accent in the same segment. The new strategy of Skoda is seen as a way of targeting sustainable profits rather than chasing sales volume. Skoda which has been struggling with customer satisfaction issues especially in the areas of service and availability of parts has launched a internal quality drive called Customer Retention Index and the company claims that it has been consistently improving this index. As Skoda grapples with decrease in sales by more than 30 per cent in FY14, the car maker would be focusing more on its current models SUV Yeti and sedans, Rapid, Octavia and Superb instead of launching new models.

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