Skoda Starts Assembly of Third-Gen Octavia in India
Executive Summary
Sales in India climbed 14.2% last year, but the VW affiliate is not satisfied with the way its sales and profitability are developing in the country.
VIENNA – Skoda begins volume assembly of the new-generation Skoda Octavia at its Skoda Auto India subsidiary in Aurangabad, India, with local sales getting under way in the fall.
With the launch of the new Octavia, the Czech Volkswagen Group affiliate follows the successful first-generation Octavia in India. Between November 2001 and October 2010, 44,900 of the sedans were sold in the country.
“At its premier in 2001, the first Octavia redefined its segment in India,” Skoda Chairman Winfried Vahland says in a prepared statement.
The second-generation Octavia has been badged the Skoda Laura in India. The launch of the third generation marks the comeback of the Octavia nameplate in the country.
In addition to the Octavia, Skoda assembles its Yeti and Superb models as well as the VW Jetta and Audi A4, A6, Q3, Q5 and Q7 models at the Aurangabad site. However, a significantly larger portion of Skoda cars locally made and sold in India is sourced from parent VW’s plant in Pune.
The VW India facility assembles the Skoda Fabia from complete-knocked-down kits and manufactures the Skoda Rapid, whichis technologically different from the European and Chinese Rapid models.
Skoda sales in the country increased 14.2% last year to 34,265 units, with the Rapid accounting for a large share of the total. In the first seven months of 2013, the Czech brand recorded some 13,800 deliveries.
About 178,300 Skoda cars were delivered to Indian customers between 2001 and the end of July.
However, Skoda is not satisfied with how its sales and profitability are developing in India.
Last year Sudhir Rao, general director of Skoda Auto India, told Indian media the local share of the next-generation Fabia would be significantly higher as part of a cost-cutting initiative. Rao also said the organizational structure of the Czech auto maker's Indian subsidiary also would be changed in the effort to reduce operating costs.
“A number of measures optimizing production and logistic costs in order to improve profitability were implemented at both Indian plants, Aurangabad and partner plant in Pune,” Skoda says in its annual report for 2012.
