Benchmarking ownership costs is an ongoing process at Skoda India

Never before has Skoda India worked as hard on brand repositioning as it did since the launch of the new Superb earlier this year. The brands assumed premium connotations in India, a good thing for an otherwise, mid-market family utility space-monger across Europe. Its associations with several fashion weeks and cocktail parties over the years and above all, an exclusive product experience earned it the luxury tag in an emerging economy that absorbs three small cars for every four sold.

Then again, there were several lapses on part of its dealership ring and consumer complaints piled up over issues of ownership costs and spares. With the parent group Volkswagen positioning similar platforms at various levels of the value chain, Skoda India threatened to break the global hierarchy or realisations the group diligently built. To break free from a consequent era of overlapping segments and products and differentiate its new offerings, it went through a series of changes, including pricing actions on its new products.

Sr General Manager, Sales & Marketing, Skoda India, Ashutosh Dixit, however, feels that the new offerings were built to a price point, for a particular segment that constitutes varying volumes across the globe. And therefore, he thinks we should not read much into the pricing actions. He, however, confirmed that there is renewed sense of urgency with which Skoda India treats its customers. He spoke to Auto Monitor on matter of benchmarking spare costs, scrutinising dealerships and offering value adds like warranty on spares to offer a comprehensive ownership experience at an optimised price point, among other things. Excerpts:

Tell us how 2009 was and what’s new that we could expect from Skoda in 2010.

In 2009, we started quite well, but I think there is a structural development in the market that is positive. In August, September and October we consecutively grew at the rate of 38, 56 and 98 percent respectively. That reflects an upsurge in volumes in all our segments. The new carlines have done their bit to add to the volumes. The strategy of multiple engines for the Laura has worked well. We would be focused on leveraging the volume up-shift in 2010 and by the second half of the next year, we plan to launch the Yeti as a CKD out of Aurangabad.

Is the positioning of the Indian brand concurrent with the international positioning of Skoda?

Basically we co-exist in most of the markets and here too, we’ll find our space to reach our volumes individually. Skoda, from that point of view, has earned a premium reputation but it is a difficult task to address the overlapping brands, because we are clear that there are unique differentiating points for both the brands. As everywhere else, in India too, there would be a segment that prefers Skoda and another one that prefers VW passenger cars.

In that light, I also understand that the new Superb is considerably cheaper than the old one.
It’s a completely new car. In that context, you have to see the cost build up in a different way. We don’t have much localisation, even though there is a project team dedicated to it. However, it’s an altogether different engine also. So, I don’t think there is much to be read on the price differential.

How are you addressing issues such as ownership costs, as some of your customers complain about the cost of maintenance?

About the cost of ownership, there are several misconceptions as well as realities that need to be stressed on in this regard. For instance, premium cars in their segments come with