Electrification is a key pillar of Skoda India’s future growth; is exploring all options to get into the mainstream EV market.
Martin Jahn, Member of the Board for sales and marketing at Skoda, says India is a very important market for the company, having broken into the top three markets for the brand globally. The company will be entering the mainstream compact SUV market in 2025, which will help the brand cater to new customers and bring in more sales.
Jahn told Autocar India that electrification is a key pillar of its future growth including India, and the company is exploring all options to get into the mainstream EV market here.
Q. Skoda CEO Klaus Zellmer has announced another phase of investment in India. Can you share what this investment is going to entail?
Jahn: We are very excited about our presence in the Indian market. We are committed to the growth in India, and we have just announced our next product – the compact SUV – made in India, for India.
So after the Kushaq and the Slavia, this is going to be our third baby, we are going to a segment that is extremely strong and important. A compact SUV, the sub-four-metre. We announced the car is coming in the first half of next year, and it should help us build volumes.
Q. The next phase of investment is another billion Euros? It’s obviously going to be electrification, so just wanted to get your thoughts on that.
Jahn: Electrification is going to be very important. Enyaq will be our first car on the market and then we are exploring the possibilities of what should come next.
Q: What are your thoughts on the volume EV play in India? Should you do it with a partner?
Jahn: We have to bring a volume EV product in India and we are exploring the possibilities. There was a lot of speculation and I will not comment. I hope you understand. There is cooperation with Mahindra on the Volkswagen Group level – that, I would say, is outside of the scope of Skoda. For India, so we are looking at options, we want to make the right decisions when we are ready.
Q: Are alliances the way forward to fund the future? Some people are doing IPOs, some people are talking private equity, and others are doing alliances. What is your take?
Jahn: We explore all the options so before we finalise any option. We don’t want to make any comment or give any suggestion, because we don’t know yet. Volkswagen and Skoda have different strategies in different continents, and we have to find the best option for India, right?
Q: We’re going to be the last market standing in ICE, clearly. That’s an opportunity for Skoda because, you know, you’ve been given the development of some of the ICE engines, which are localised over here as well. Is that an opportunity for India?
The fact is that internal combustion engines are going to be quite long over here. It may not be so in other parts of the world. No country is confident that they will go 100 percent electric, not even China, not even the United States. So we will see what the future of ICE will be in India.
Q: On the sub-four-metre, what is the potential for the model? The export potential may be limited because the sub-four-metre is very unique to India. Also, you don’t have Volkswagen to share the scale with. Is that a bit of a challenge? How are you going to build volumes with this?
Jahn: We now reached 1,00,000 cars over the last two years and then by the year 2026, we want to achieve 1,00,000 in one year and that’s our vision at the moment. Also with that, we are expanding our dealership network. We are now at over 260 touchpoints, which is significant.
Over the last two years, we have increased the service points, so our cars can be serviced. So we have to look at the brand wholly: the production, sales, after sales, customer service. So that’s really our focus at the moment and we always go step by step.
Q: Do you think compact SUVs have a limited global appeal?
Jahn: The markets are very volatile; we have to see which markets are more inclined towards ICE and which segment can go more electric. Where can we sell this car profitably? We’re exploring that but no major decisions have been taken on that, because it is not easy. If we can export this car with a profit, we will do so.
Q: You are obviously very invested here but it’s very hard to make money in this market. How can you hold onto your position and even grow it?
Jahn: India is an important market for us. It is amongst the top three international markets. We now must make sure that we have good service for our customers, that they love our cars. For me, customer satisfaction is important. So, we are focused on having the right size of the dealer network, along with an adequate service network, and bringing the brand to India, which is based on human touch.
So, we want to be a humane brand that makes people smile. How we establish the brand, how we grow brand awareness; because the idea is to make a brand that is loved. It’s still not known in all the parts of India and that will be important for us. So, we are learning more about the Indian customer, and learning more about the market by bringing new products.
Q: Your sister brand VW has edged ahead of you in India, would you be looking at getting back to the top?
Jahn: Of course, with the sub-four-metre, we are aiming for that, and this additional product gives us the leverage.
WITH INPUTS FROM KETAN THAKKAR
Also see:
Skoda targets 1 lakh annual sales by 2026 with new compact SUV
Skoda Kushaq Explorer Edition revealed
Skoda Octavia facelift revealed