Skoda Fabia to be localised further

Czech carmaker Skoda will reposition its Fabia hatchback to make it more competitive with higher localisation and lower cost of ownership as part of a plan to garner 4% share in the Indian car market in five years.

The firm, which has identified service and cost of ownership as its biggest weakness, is also changing its organisational structure as part of a new strategy devised after a series of meetings with the company chairman at its headquarters in Czech Republic.

"The immediate focus is to create the right organizational set up and changing or rather improving our perception (in the marketplace) on cost of ownership," Sudhir Rao, MD of Skoda Auto India, said. "An all new highly localized Fabia will be cornerstone of that strategy," he told ET.

Skoda plans to introduce the new Fabia in 2-3 years. It is expected to make or source 80%-90% of its parts in the country. At present, the localised content in Fabia is about 50%. Skoda's owner Volkswagen has already announced plans to build an engine plant in the country.

Rao says the new Fabia will be very competitively priced and the company expects to sell 75,000-1,00,000 Fabia cars a year. Skoda also plans to bring in new models and refreshes in the mid-size, executive and premium sedans to consolidate its presence in the country. All these models will come with high localisation and priced competitively, officials said.

To address the cost of ownership issues, Skoda recently appointed Charles Stroud, a veteran in after-sales service, as head of after sales. And a few weeks ago, it mobilized 44 senior officials across various functions of marketing, PR, finance, HR and logistics to study the customer care process at dealerships and discuss ways to improve customer ownership.

"Right now, the focus is on service, sales and marketing in that order, as we build our portfolio," Rao said. Skoda sold 30,000 cars in 2011. It aims to sell 40,000 units in 2012. Till end August, the company has sold 30,000 cars, 30% more than the first eight months last year, thanks to the decent market response to its mid-size sedan Rapid.

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