MUMBAI :

Skoda India’s latest car, the Slavia, is poised to shake up the sedan segment in India. During an interaction with Zac Hollis, Brand Director, Skoda Auto India, recently, he fielded a volley of questions around the Slavia and spoke about their auto business. Excerpts…

On Skoda Auto India launching a sedan:

You have to consider why segments fall and rise. Partly because of consumer taste, partly because manufacturers create new segments and launch new cars. You only have to go back 30 years, the first MPV was the Renault Espace, there was nothing else before that in the 7-Seater [segment] and [then] everybody launched new cars and the segment grew. This is the same thing to a certain extent about SUVs, everybody launches new cars, lots of marketing, people see it and automatically the segment increases, this is what happens. And if you look at the sedan segment in India over the last few years, nobody has launched anything new and so, there is no exposure to the sedans. Nobody is marketing the cars; nobody is coming looking because there is nothing new and we bring something new to the segment. We bring a gorgeous looking car and we will revitalize our segment. This will grow. I’m not worried about the sedan segment. I just think it has lacked focus from automotive brands.

On Honda City:

Honda City sells around 2,500-3,000 cars a month, those are our ambitions for this car – to sell 2,500 – 3,000 cars a month. Our ambition is to be segment leader. I am confident that we can do that. To do that, we will have to be competitively priced and we will be because we want to be segment leader with this car and I am confident because we are bringing in new cars. I would say that Honda volumes is where we aim to be.

On potential buyers of Skoda Slavia:

We will attract people perhaps that were traditional Octavia buyers because Octavia has gone up in price, because it is a CKD and because it is affected heavily due to the exchange rates and partly because of the technology that is on the car – it is an amazing car and it really competes with some of the premium German cars. There will also be some sedan buyers who will be moving up from sub-4-meter to a sedan because their lifestyle [has] improved, their career prospects, their purchasing power [has] improved… because the economy grows, and some people will come back from SUVs and hatchbacks because they want something new and here is something new for them as well. 

On Skoda Slavia’s strengths:

My view is that we have a big gorgeous car with incredible engines and handling and gearboxes. From a brand that has been delivering value luxury sedans for 20 years, I think that is what we bring. If anybody can revitalize the sedan segment it is us because we are famous for delivering great sedans for the last 20 years like the Laura, the next generation Octavia, the Rapid, the Superb, all of these have been great sedans, well-received by the marketplace, and of course, Slavia joins that group. 

On phasing out Skoda Rapid:

The Rapid is [built] on the PQ (PQ25) platform and very few brands in the VW group are still using that PQ platform. We have to move on to MQB – the MQB A0 platform has been localized in India and now, we have to design cars on that platform and what we have done is design the biggest car that we can on the MQB A0 platform localized in India. Yeah, I would love to have a car underneath this car (Skoda Slavia) but it is just not possible to keep the PQ platform going.

On Skoda Slavia cannibalizing Skoda Kushaq:

At the end of the day someone can walk into the showroom attracted by the Slavia marketing campaign in the first quarter next year and walk out with a Kushaq…I’m very happy. I don’t mind. The great thing about the MQB A0 IN platform is that I’m supposed to produce in three months, 3000 Kushaqs and 3000 Slavias. If I change it and make 4000 Slavias and 2000 Kushaqs, I can do that because they’re all running on the same production line and underneath is the same platform, so we’ve got that flexibility within the platform and we can also switch production between our two brands. If you were to go to Chakhan in Pune in a year’s time, you will find all four INDIA 2.0 cars on the same production line. 

On Skoda India’s plans for a hot hatch:

I think you have to look at the business case and where the volume potential is. We decided with INDIA 2.0 to start with two cars [and] where’s the maximum volume potential, what the best business case is… and the best business case we perceived was to make a mid-sized SUV (Kushaq) which had a premium in the marketplace and the premium mid-sized sedan (Slavia). But we will bring more products on the back of the MQB A0 IN platform in the future because once you’ve localized the platform, that’s the hard thing to do, and the engines and gearboxes, you can then put different body styles on it, so we start with these two body styles and the future will bring more body styles. We haven’t decided which body styles yet, we could bring a sub-4-meter SUV for example, that’s a popular segment, a hatchback is also possible, on this platform, now that it is localized. You also have to consider that If I have a good-looking SUV like the Kushaq how many incremental sales am I going to get from a hatchback. In a way it is similar kind of body portions, etc, so we have to make sure the business case is right but we will bring more body styles in the future.

On Skoda India’s shiny, new dealerships:

What hits me when I walk into dealerships is a highly motivated team, very motivated sales teams, highly motivated by launches like this, and the response they’re getting from Kushaq as well, and of course, I bring that motivation, that energy when I walk into a business. We as a brand are selling cars from the Rapid all the way up to the Kodiaq. There aren’t many brands capable of spanning such a price gap from 8-9 Lakhs all the way upto 40 Lakhs and I think we have achieved that with our brand. When people walk into showrooms, they also have that feeling of value luxury proposition. When you walk into a showroom, you’ve got crisp, clean, modern, premium environments. What we’ve been trying to do is create a value luxury experience for customers when they come in and that’s quite a lot to live up to, to get that experience that matches the product because I want to give the same experience to someone who is coming into buy a Superb to someone who is walking in to buy the Slavia. If you look at dealerships in the city, you will see that we stand out. Sometimes Service teams initiatives get left out, but we need to motivate them as well.

On Skoda India watching other product launches:

This is one group and you can bring products such as Kushaq into the market because you’re sharing costs across two brands but there is also learning to be taken. I watch everybody’s launch in India and say what can we learn? What can we learn from competitor launches and how can we make our launches even better? I challenge the team, we say okay, we’ve launched the Kushaq, what can we do to make the next launch even better and that’s the challenge that they’ve risen to, to make sure that this launch is even better than the last one and I was the first one who went to my counterpart in Volkswagen, Ashish Gupta, and said “Here are your learnings from me from Kushaq” and he said “Thank you very much” and I expect him to do the same. I want him to be successful and he wants me to be successful. I have my targets, he has his targets, as long as we achieve them everything’s okay. 

On current demand and semiconductor shortage: 

Demand is strong, it is going really well. We have stock, dealers have stock, we are delivering cars. The market is there, the demand is there. The concern that we have is whether we can supply that demand because of semiconductors. It is a global issue, everyone is aware of what is happening with semi-conductors. On the positive [side], we are getting some priority from the group because we are launching new cars. What you don’t want to do is you launch a new car and then not supply and then three months later do a re-launch and spend more money, etc, etc. So, without a doubt, it is affecting us, when is it going to fix itself? Middle of next year when things start to improve by and large. At the moment, I really don’t know how many semiconductors I’m going to get the week after next, it really is that dynamic. It is a difficult environment but we’re getting supplied and of course, the cost is going up but hopefully it is only temporary.

On localization:  

We will try to localize as much as we can, I’m not a production guy but we will try to localize what we can. The fabulous 1.0-liter TSI engine of the Kushaq and of the Slavia was so well-received. The power that you get from that engine, the whole driving dynamics of that engine and you can drive it conservatively and get great fuel economy form that engine and that’s good news because that would be localized in India. So, yes, we try and localize.