Sales of midsize sedans have been shrinking over the years. A key reason, Zac Hollis of Skoda Auto India says, is that there haven’t been many new launches to excite the market.
Sales of midsize sedans (in the Rs 10-16 lakh space) have been shrinking over the years. A key reason, Zac Hollis of Skoda Auto India says, is that there haven’t been many new launches to excite the market and bring customers to showrooms. “We aim to change that, by bringing sexy back to the sedan,” he tells FE’s Vikram Chaudhary.
The midsize sedan segment has reduced to a fraction of passenger vehicle sales. Isn’t it too tiny an area to enter into?
A reason it has been shrinking in size is there is nothing new for people. All carmakers have been launching SUVs, and this has led to a lot of excitement around SUVs. Over the last few years, dozen-odd all-new SUVs have been launched, but very few all-new sedans.We expect that to change with the Slavia. In India, we have a strong history of selling stylish sedans—from the Octavia to the Laura to second-generation Octavia and the Superb and the Rapid, we have succeeded with each sedan. The Slavia is a natural extension. Sedan sales have been falling, but we will bring sexy back to the sedan.
But why will a customer who has an SUV on her mind consider a sedan such as the Slavia?
The first thing is the Slavia looks absolutely gorgeous.The second is the Slavia is a very big car—it’s bigger than the first-generation Octavia, bigger in most dimensions than the competition, and has 521 litres of boot space. An SUV of similar proportions has 400-odd litre boot space. Also, the boot of a sedan, because it’s longer than that of SUVs, always offers more usable space.The third is TSI engines—these are some of the world’s most advanced engines, offering exceptional power and great fuel efficiency.The Slavia will attract SUV customers into the sedan fold. Also, from a ride and handling perspective, a sedan offers a much different experience compared to an SUV.
Why are you offering two engine options in the Slavia?
One is the 1.0-litre TSI engine, which would be very cost-competitive, and yet offer one of the best power and torque figures in its space. This model is almost wholly made in India (95% localised).Another is the 1.5-litre TSI engine, which has no competition—there is no performance-focused midsize sedan in the market. This model is being assembled in India.
Have you almost covered your targeted market as far as sales and service outlets are concerned?
When the India 2.0 journey started in 2018, we had about 65 outlets. Now we are present in 117 cities, with 175 customer touchpoints. We will open 30 more outlets this year, not only to increase our sales but also to service existing customers who may be located in smaller cities.
Premium hatchback sales are touching 40,000 units per month. Is that a focus area for Skoda? You used to sell the Fabia a few years ago…
We have localised the MQB A0 platform (called the MQB A0 IN), on which we produce an SUV (Kushaq) and a sedan (Slavia), and we will decide the best body type to bring next, because any kind of body type can be developed on the MQB A0 IN.
Last year you said Skoda India will sell over 1 lakh cars by CY25…
We are on target. In CY21 we sold about 23,000 cars, and this year we plan to treble the sales volume. We might just reach there faster.
‘Skoda cars are expensive to maintain.’ Is this a perception or reality?
Earlier it was part perception, part reality, but we have worked towards fixing both. It takes time to change perceptions. People who have bought the Kushaq have experienced much lower cost of ownership, and there is a reason for that. Our cars are now 95% localised, and therefore almost all parts are made in India (earlier some parts used to be imported and that raised the cost of ownership). We have also been taking focused steps to reduce the cost of ownership—about two years ago, we reduced prices of car parts by 18%, and about a year ago we reduced servicing costs by 21%.
So what would be the cost of ownership of the Slavia?
While its ex-showroom price will be announced soon, the cost of ownership is only 46 paise per kilometre.
Last year you said Skoda may launch the Enyaq electric SUV in CY23…
The car world is going electric. We have plans for India and the Enyaq premium electric SUV is one possibility.